How Dwolla’s Access API quickly allowed fintech platform, Sweep to get to market.
UPDATE: Sweep has been acquired by Affirm and this Dwolla integration is no longer active.
According to the 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.
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.
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.
“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
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 Access 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 bank transfer 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.
Interested in how your business could be utilizing the Access API within your platform or application? Reach out to our sales team.