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dwolla case study Archive - TransSwipe - Merchant Services and Credit Card Processing

TransSwipe - Merchant Services and Credit Card Processing

Archive for the ‘dwolla case study’ Category

How GOAT delivered marketplace payouts using Dwolla’s ACH API

GOAT: How Dwolla’s White Label ACH API created the ideal payout experience for a retail marketplace

Blog - Goat Screen

Download the case study PDF.

Problem: An existing payout flow created unsustainable costs for a two-sided marketplace and friction for its sellers. The company needed a non-branded ACH payout solution that could be quickly implemented, scalable, and complement its existing buy-side processor.

Results: The marketplace purchased and integrated Dwolla’s White Label ACH API in 10 days, maintaining end-to-end branding and mitigating direct and indirect costs.

According to MarkMonitor, 24% of consumers have been tricked into buying fraudulent goods online. For the luxury sneaker resale market—worth an estimated $1 billion—a business model and platform that creates trust is critical. Having become the leading mobile marketplace for sneaker enthusiasts, GOAT’s “hybrid” model might just be the trick.

The Situation

Sellers list their rare sneakers to GOAT’s mobile marketplace. When purchased, sellers ship the kicks to a centralized fulfillment center for inspection and quality control. Once verified as authentic, the shoes are sent to the buyer and the seller receives their funds. GOAT used a well-known family of payment services to collect mobile payments, hold funds, and distribute money to sellers.

Blog - GOAT Situation

The Challenges

GOAT sellers should be able to simply enter their bank account and routing number to direct funds to their bank accounts or, better yet, use the new funds to purchase sneakers back from the platform. Unfortunately, GOAT’s existing family of payment services enforced limitations and burdens on the cash out process.

For example, if a buyer used digital wallet (A) to buy sneakers on GOAT, the seller was required to open an account with digital wallet(A) to claim the funds and withdraw them to their bank account. If a buyer used digital wallet (B), the seller would have to repeat the registration process with both services so the seller could route funds from B to A to the seller’s bank account.

Blog - GOAT Challenges

Maintaining the existing payout solution would not only erode GOAT’s brand and trust with customers, but jeopardize a breakout sales season. GOAT needed an in-house bank transfer solution, one that could offer a seamless cash out experience and be up and running quickly.

“It was fine, at first, but as we started to scale so did the complaints. It got so bad  that we began using a credit card to accelerate payouts. When you’re a marketplace, sacrificing 2  to 3% of your profit margin to maintain a user experience that you don’t even control is just bad business.”

How Dwolla Helped

 

Dynamic ACH platform

GOAT was satisfied with its buyer checkout process, but not its seller payout experience. The friction and limitations had increased complaints and time to resolution for customer support. GOAT needed a “plug n’ play” solution to complement its existing pay-in flow and compliance requirements without restricting repurchasing or cashout behaviors.

Solution: With 4 API endpoints, GOAT leverages Dwolla’s banking relationships and infrastructure to automate payment flows, aggregate funds, tokenize customer bank information, and initiate bank transfers through the Automated Clearing House network.  Dwolla’s webhooks allow GOAT to offer real-time custom status notifications to its sellers.

Outcome: The simplified funds flow and notifications decreased cashout related support tickets by 80% and time to resolution by 50%. Now sellers have two cash out options: cash out directly to a bank account or use GOAT’s new “Account Balance” to buy new sneakers from its marketplace.

Flexible customer experience

Sellers wanted a seamless cashout experience inside of GOAT’s mobile application. The existing experience created a host of challenges, requiring sellers to sign up for and transfer funds between up to two third-party e-wallet services. This process meant funds could take up to 7 days to reach a seller’s bank account, inhibiting their ability to repurchase from the marketplace.

Solution: GOAT uses Dwolla’s White Label API to design a simple, branded way for sellers to connect a bank account to their marketplace profiles via the native GOAT mobile application. The one-time experience provides GOAT an OAuth token to credit a seller’s bank account at a later time and create additional customer experiences. To accelerate seller liquidity, GOAT uses Next-Day bank transfers for faster payouts.

Blog - Goat Screen 2Outcome: By owning the customer experience from end to end, GOAT has eliminated the need to redirect sellers to multiple third party sites in order to register for different digital wallets, simply to receive sneaker payments to their bank accounts. This has reduced sellers’ time to liquidity from up to 7 days to an average of 2, and increased bank transfer payouts by 50 percent.

Time-to-market

To offset the influx in support resources and costs incurred from payout complaints and issues, GOAT had begun using its credit card to simplify and accelerate bank transfer payouts for its sellers. Because of this, the marketplace was hemorrhaging profits by 2 to 3 percent during the busiest shopping season of the year. GOAT needed a payment solution that could be implemented quickly.

Solution: GOAT turned to Dwolla’s clean API documentation and new developer portal. Featuring automated tasks, simple Getting Started guides, and the Sandbox Console, the team was able to get to work prior to purchasing the White Label platform. GOAT had a tech solution, not just a payment solution.

Outcome: GOAT was able to quickly and deeply integrate Dwolla White Label, launching a branded bank transfer option to their sellers in just 10 days—quickly stopping the 2 to 3% bleed caused by credit card payouts.

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Dwolla Case Study: How Sweep Uses Dwolla ACH API for Bank Transfers

How Dwolla’s White Label ACH API quickly allowed fintech platform, Sweep to get to market.

Download the case study as a PDF
.

slider-mockup-1According to Center for Financial Services Innovation, consumers who have regular savings habits are 4X more likely to be financially healthy than those who don’t. Unfortunately, 57% of Americans still struggle financially and more than 72% suffer from stress and anxiety related to money (American Psychological Association). Sweep hopes to fix that.

Problem: A consumer fintech platform wanted to offer its customers an automated savings product using bank-to-bank  transfers.  The company needed to meet all regulatory and compliance requirements in an aggressive timeline.

Results: The company integrated Dwolla’s White Label payments API to facilitate ACH transfers in around 40 hours and successfully announced product on-stage at Money2020.

The Situation

How Sweep Uses Dwolla ACH API for Personal Financial Planning App

Sweep was created to help young, millennial consumers save and stay ahead of their needs.  After downloading Sweep’s mobile app, users connect the platform to their bank accounts and then organize their funds into “buckets” for goals, expenses and bills.  

From the very beginning, the vision and roadmap included automating these savings behaviors to fill those buckets and grow savings according to the user’s needs.  For example, a user who created a “Wedding” bucket would be able to automatically transfer $100 from her main checking account at a multinational bank each payday to a savings account associated with the goal—in this case, say, at her local credit union. Unfortunately, Sweep encountered a number of regulatory and technical hurdles that prevented them from including and automating bank-to-bank transfers in its initial launch earlier in 2015.

The Challenges

Lacking this functionality to programmatically transfer funds meant users had to visit separate online banking portals and manually transfer funds between banks to fulfill their savings goals. Automating the process was critical for millennials and they didn’t have it, yet. 

FinTech Application Sweep Uses Dwolla API for Bank Transfers

“Unfortunately, our ideas were too new for the banks and traditional payments processors. We considered building our own payments gateway but the banking relationship and compliance requirements would have blown up our roadmap and crippled our product plan.  We needed an innovative technology partner with a proven banking relationship.”  

CEO and Co-founder, Jackson Gates

Jackson - Sweep

Time to market

An end-to-end payments solution would require a direct banking relationship and 3-6 months of development time, not including the upfront compliance and regulatory hurdles.  Other payment gateways were working on new banking relationships but couldn’t guarantee a timeline or necessary functionality.  Sweep needed an immediate solution.

Solution: Unlike other payments solutions, which used non-descriptive and difficult to parse XML, Sweep leveraged Dwolla’s “clear and concise API documentation and excellent engineering and customer support” to build the solution in around 40 hours.

Outcome: With Dwolla’s White Label API, Sweep was testing live payments within days, and completed all production testing in-time for its Money 2020 announcement.

Regulation and compliance concerns

In addition to the time and cost associated with compliance and regulatory requirements, the uncertain and shifting regulatory climate made it difficult to predict the mid- to long-term needs of supporting a proprietary payments infrastructure.

Solution: Through Dwolla’s API and built-in processes, Sweep outsourced its payments back end, including bank transfers via ACH, to Dwolla. By partnering with Dwolla, Sweep leveraged Dwolla’s experience for managing the compliance, fraud, and security elements of its payments experience.

Outcome: Sweep launched its automated savings product with fixed and comparatively minimal direct and indirect costs. By leveraging Dwolla’s banking relationships, Sweep avoided holding customer funds or inserting itself in the funds-flow, thereby reducing regulatory and compliance challenges.

Core functionality and user experience

Sweep’s strength is its ability to create a simple, beautiful mobile interface and user experience.  The company was wary of integrating any functionality that would feel foreign to the app or confuse the customer.

Solution: Dwolla’s payments platform helps with handling KYC, customer records, adding bank accounts, and initiating ad-hoc and recurring transfers using event-based webhooks. The white-label API allows Sweep to offer a seamless user experience while maintaining the look and feel of the Sweep app.

Outcome: Today, Sweep users enjoy a full-featured, powerful savings tool embedded in a Sweep branded, beautiful mobile experience.

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Interested in learning more about an ACH API for better payments? It’s simple. Reach out to an integration specialist to learn more.

Reach out now, green

Case Study: Clear Capital Streamlines Disbursements with Dwolla

  • Monthly payouts via paper checks are costly, averaging roughly $1.00 per payment.
  • Digital solutions streamlined and accelerated the payments process, improving vendor satisfaction.
  • By passing on the additional savings from using Dwolla, Clear Capital is now able to double the frequency of payouts each month.

About Clear Capital

Clear Capital is a nationwide provider of residential and commercial real estate valuations, data and analytics, quality assurance services and technology solutions for mortgage lenders, servicers, investors, GSEs and Ratings Agencies. Their solutions include appraisals, broker price opinions, property inspections, commercial valuations, value reconciliations, appraisal review and risk scoring, automated valuation models, home data indices and platform products. Founded in 2001, Clear Capital recently received Morningstar Credit Ratings, LLC’s highest Residential Vendor Ranking, MOR RV1. After receiving feedback from their network of more than 40,000 real estate brokers, agents and appraisers requesting an online option for receiving payments, Clear Capital began looking for a digital option that was secure and easy to implement with their current platform.

Overview of Problem

Vendors wanted a faster and more modern payment method: The financial and administrative costs of paper check processing constrained Clear Capital to sending one payment per month to their network of real estate brokers, agents and appraisers. Their vendors began asking for a direct deposit alternative that could speed up cash flow and align more closely with the completion of work.

Security, liability, and privacy concerns: Moving to a traditional direct deposit or ACH processing platform would have required Clear Capital to collect sensitive account and bank routing numbers from their vendors—increasing their compliance and risk management costs due to the privacy and information security concerns.

A new solution requires ease-of-use and trust: Vendors were familiar with traditional ACH direct deposit where they would provide bank account and other personal information by form or voided check. They were less accustomed to an entirely online sign-up process. The digital payment solution needed to be as frictionless as possible, and evidence clear benefits—faster payments more often.

Dwolla’s Involvement

With an affordable cost structure, powerful payments tools, and flexibility to accommodate both large and small customers, Dwolla is an easy solution for streamlining and modernizing disbursement processes. The company presented Clear Capital with options ranging from a free account on Dwolla.com to high-tech integrations capable of hosting Dwolla account creation within a vendor’s existing dashboard.

Results/Outcomes

Faster, simpler disbursements: Dwolla processes a wire transfer from Clear Capital same-day and disburses the amounts owed to thousands of vendors via the Dwolla MassPay API, sending funds directly to the clients’ respective bank or credit union accounts. This cuts transfer times to just 1-2 business days. When Clear Capital began making two monthly payments instead of just one, a convenience its vendors have been asking for, it was a seamless process.

Improved data security and privacy: Private bank account and routing information is never visible to anyone at Clear Capital, thus reducing information security risk. To receive payments, a Clear Capital vendor can set up a Dwolla account using an email address and password, then securely link a bank account—all within their Clear Capital dashboard. Clear Capital distributes payments using only the recipients’ email addresses; funds are then routed straight to the vendors’ bank or credit union accounts. Vendors receive real-time notifications when Clear Capital initiates their payments, and when funds are expected to become available.

On-boarding customers successfully: Dwolla’s straightforward partner site registration, easy-to-use payment process, and dedicated customer support staff collectively enabled customers to seamlessly transition from receiving physical checks to digital payments. After five months, Clear Capital transitioned more than 30 percent of their total payouts recipients to Dwolla.

Going digital within resources: The lightweight integration of Dwolla account creation within the Clear Capital dashboard, together with the Dwolla MassPay API, allowed Clear Capital to quickly establish an improved disbursement process for their vendors.

“When our brokers, agents and appraisers in the field are happy, it’s a win for us. Dwolla has eliminated a big frustration from our network of real estate brokers, agents and appraisers when checks go missing in the mail. A digital solution has saved us more than $.80 per payment, which has allowed us to pay them more often—twice a month, instead of just once at the beginning of each month. As a technology company ourselves, we are familiar with costly and time intensive integrations. It has been seamless to integrate our application with their system.”

READ MORE: Making Payouts Easier, How Community Sourced Capital Did it

 

 

©2017 TransSwipe

 


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