Dwolla launched FiSync with a banking partner in 2012. The special bank API was the first real-time funds transfer system in the United States. Our second integration launched in 2014. By the end of 2015, Dwolla had made the decision to shift its focus to building the ideal API for developers. Despite the transition, Dwolla has remained committed to bringing about a faster, more modern and accessible banking infrastructure to its customers. The following post outlines the recent industry developments and offers a downloadable version of Dwolla’s faster payment proposal.
For decades, governments around the world have been standing up real-time payment infrastructures. Historically, the United States (aka “the world’s largest economy”) has been behind the curve on faster payments, opting to let market forces take the wheel and steer. For a number of reasons over the last forty years(some of which are highlighted here), that didn’t happen.In late 2014, industry and regulatory sentiment in the United States began to change. Pressure has begun to mount for faster, more modern payments from all sides: businesses, consumers, and even banks and regulators. Finally, in January 2015, the Fed made a move. While it couldn’t unilaterally create a faster payment system, it did have the authority to convene the industry as a leader/catalyst and drive the discussion.
In all, over 300 banks, businesses, consumer groups, technology providers, and more voluntarily came together to form the Faster Payments Task Force. Part of the group’s charter was to collectively identify and evaluate faster payment systems in the United States and, in May 2015, Dwolla was elected to its steering committee by its fellow task force participants.
The Fed’s task force allowed Dwolla and others in the market to share their respective experiences and technology. In conference centers, emails, calls, and airplanes, task force discussions drove clarity on topics that were previously ambiguous in payments. Disagreements and assumptions began to be replaced with consensus and addressable gaps.
A few months later, the task force drafted and ratified a set of Effectiveness Criteria. The set of 36 criteria acts as a rubric, allowing the industry to evaluate the effectiveness of a solution during the next phase of work: Faster Payments Solution Proposals Submission and Assessments.
The Dwolla Proposal
Much to our surprise, simply talking about FiSync with the task force did more to advance the conversation than ever connecting it to and moving money with a bank. Despite our decision to stop actively selling FiSync to the marketplace in 2015, we still saw value sharing what we had learned and contributing the technology to the proposal process became a company-wide priority.I don’t want to spoil the 163-page turner, but the submission draws from many of FiSync’s faster payment technologies and processes; offers new ideas around directory services and bank pre-authorizations; and lays out incentives for modern means of access. It’s certainly not perfect, but it’s a continuation of our commitment to bring about a faster, more modern bank transfer system.
It’s our hope that by sharing, discussing, and improving the proposal with our community that we can accelerate Dwolla and the market’s readiness for real-time. We look forward to chatting with you.
A couple of quick legal disclaimers (to accommodate our participation agreement):
- Dwolla is only able to share the original April 2016 submission. Additional comments and enhancements to the proposal that were derived by the task force review process (since April) are considered task force confidential work products and cannot be disclosed at this time. All final proposals and assessments will be available in the task force report due out later this year.
- The Federal Reserve did not collaborate or materially aid in creation of this proposal nor does it commit to provide any role, service or product mentioned therein.
- We cannot share or comment on our assessments to date, so please don’t ask.