When a third-party application requests permissions from Dwolla, users would be prompted to “Allow” those permissions. (Note: Integration with Zaarly isn’t yet completed.) Screenshot courtesy of Dwolla.
With late May seeing an upgrade from Square and a new product rollout from Google, some folks on the the Silicon Prairie may have been wondering if Des Moines-based Dwolla had something up its sleeve, as well. Was May going to be the month of mobile payments announcements?
Dwolla did indeed have something up its sleeve. But unlike Square and Google, which seem likely to butt heads in the coming years, Dwolla has its sights set on playing nicely with them both and becoming a payment network that’s easy to integrate and highly trusted.
“It’s all about interaction with other platforms,” Dwolla CEO Ben Milne said in an interview last week. The technology behind that interaction is a feature Dwolla went live with this morning called Grid.
Similar to how Facebook Connect allows a user to register for a third-party application but keeps his or her personal information within its borders, so too will Grid allow a Dwolla user to pay for a good or service outside of their native app but keep a user’s personal data within the walls of Dwolla.
“We want to go integrate with everybody,” Milne said, “but one of the inherent issues that we have is the more people we integrate with, the more people have access to user data and the more fraud is possible. What we’ve tried to figure out is what if we just blew up the whole model and we said ‘Well, if Visa could start over today, how would they do it?’ ”
Milne believes that Visa wouldn’t knowingly give everyone access to credit card numbers, expiration dates and allow for finger prints to be left, essentially inviting people to commit fraud.
“Grid,” which was built these past two months, “blows up the model and allows you to integrate with other platforms without giving people access to your actual personal data, and then it allows you to revoke access to any application that you attach that payment mechanism to … anytime, you can see basically footprints of where you been and applications that are storing your data, and totally revoke access in real-time.”
In their account, Dwolla users are able to edit and remove access to applications they have previously approved. Screenshot courtesy of Dwolla.
In addition to making payments more secure, Grid also gives developers an opportunity to connect with the data Dwolla users have collected, such as where they’ve spent their money. Milne mentioned getting apps like Mint.com on the Grid, but aside from those that already exist, he’s interested in what Dwolla’s developer community will create.
“The ones that I’m really interested in initially are the people that are going to pull in everything that Dwolla does, like, what happens if a coupon platform starts targeting Spots,” Milne said. “So you connect with the Grid and then all of a sudden you’re yanking in Dwolla Spots and you’re recognizing which spots maybe that individual has already engaged in based on their transaction history and then you’re presenting coupons back to them … all of a sudden couponing became relevant.”
With Dwolla’s revenue model based around user transaction fees (a flat $0.25), Dwolla will continue to push the use of its network to facilitate cash transactions. This is why Milne and the team aren’t discouraged by Square and Google’s latest moves, instead they’re encouraged by the fact that mobile payment platforms they hope to hook up with continue to expand.
“Dwolla is just a way for (Square or Google) to get another loading mechanism in and make more money,” Milne said. “For us, we don’t really care. What we want to do is allow people to engage in the types of transactions they want, and if that’s inside of a Square’s network or inside of PayPal’s network or inside of Google’s network, we don’t really care.”
When asked if Dwolla will eventually add credit card transactions to its virtual wallet, Milne said: “We got so much stuff in the pipeline that makes me believe that we’re not going to need to … over the next 6-12 months, I think we’re going to start ramping up some of this stuff.”
Stay tuned to Dwolla’s blog for an official Grid announcement later today.