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6 min read

Dwolla for Real Estate: Empowering Modern Payment Solutions

Like many industries, companies in the real estate industry are finding that updating technology stacks is crucial for keeping up with the demands of an increasingly digital world. Digital transformation has become a cost-effective solution to enhance payment speed and security. In response to legacy technology and outdated payment options like paper checks, digital transformation can improve relationships with clients, suppliers and vendors in the process. 

Understanding the Industry’s Key Challenges

Outdated payment systems are not only cumbersome for real estate companies and their clients, but they can also lead to errors, higher operational costs, slower processes, increased exposure to fraud and other security risks.

Image displaying that outdated payment systems in real estate lead to higher costs, increased errors, slower processes, and elevated fraud & security risks

 

Why Replace Legacy Technology?

While the majority of real estate firms (99%) rely on legacy methods for B2B transactions, a digital transformation in payments is on the horizon. This 2023 PYMNTS study reveals a significant gap between current practices and future plans, with a staggering 90% of real estate firms planning to adopt real-time payments for receiving funds within the next year. Real estate firms are being driven by the potential for faster settlements, reduced costs associated with checks and manual processes, and the ability to strengthen relationships with vendors and suppliers. 

A digital transformation in payments seems inevitable for the industry since 84% of real estate companies believe real-time payments will soon replace paper checks.

Legacy technology increases the chances of slow payment processing times, human error and wasted resources. When real estate companies hold onto outdated payment systems and manual processes, they risk losing valuable time, money and resources required to enhance business goals and build customer and vendor loyalty.

What Are the Effects on Client and Industry Relationships?

The PYMTS study found 87% of real estate firms cited vendor and supplier relationships as highly influential in the methods they choose for making payments.

Legacy technology can cause problems for real estate businesses, even when electronic payment methods and online transactions are available. For example, processing times may be extended, resulting in delayed access to funds. When these issues occur, real estate businesses can suffer from loss of trust, damaged reputations and severed ties with clients, suppliers and vendors.

How Do These Issues Impact Payment Security?

Paper checks are a relic of a less secure era. The National Cybersecurity Alliance reported nearly 10,000 Americans were victims of real estate scams in 2023, totaling over $145 million in losses. This underscores the vulnerability inherent in paper-based transactions. With the ease of check fraud, including forgery and alteration, real estate companies that rely solely on checks expose themselves to significant financial security risk. The transition to digital payments is imperative to safeguard funds and protect clients from falling victim to these increasingly sophisticated and frequent scams.

ACH Payments vs. Paper Checks: 4 Advantages You Need to Know

image showing that dwolla's solution creates happy clients, improved security, increased payment speeds, and lower payments costs.

Dwolla Digitally Transforms Payments in Real Estate

Dwolla enables real estate companies to replace their outdated, manual payment methods and legacy technologies with account-to-account (A2A) payments, also known as pay-by-bank payments. A2A payments solve the main problems impacting real estate and provide businesses with a modern solution that increases speed, transparency, reliability and security.

Increased Payment Speed with Lower Costs

Dwolla is powered by A2A payments, which have lower processing fees when compared to credit cards and other payment methods. Dwolla’s single API replaces paper checks, manual processes and legacy payment technologies with streamlined, digital open banking features and A2A payments. This provides real estate companies access to instant account verification, instant payments and an enhanced payment processing platform via the ACH Network, RTP® Network and FedNow Service®.

With Dwolla, real estate transactions are processed quickly and include real-time payment data visibility to easily track and report on payments. Dwolla also makes real estate payment automation possible, improving cash flow and increasing payment predictability.

Enhanced Client and Industry Relationships

Dwolla’s payment solution streamlines the process of replacing legacy technology with a single API. This reliable solution provides the real estate industry access to open banking features, instant pay-by-bank payment methods, developer resources and embedded payments that help them deliver elevated customer experiences. 

Dwolla makes efficient real estate digital payment solutions possible. With automated payments, vendors and suppliers can receive payments faster, providing a smoother, more predictable payment process. This increases vendor and supplier trust and loyalty.

Additionally, Dwolla's white-label solution empowers businesses to maintain their unique brand identity while seamlessly integrating modern payment capabilities into their current user experiences. By providing a customizable platform, Dwolla allows companies to tailor the payment experience to align with their brand aesthetics and customer preferences. This level of control fosters trust and loyalty as customers interact with a familiar interface.

Improved Payment Security

When payments are initiated via Dwolla’s API, tokens replace sensitive data to maintain security. This means account details and routing numbers are safely stored within the platform for a more seamless experience that does not require entering and transmitting sensitive information each time real estate transactions are made. 

Dwolla's Open Banking Services help enhance payment security. Through direct bank connections, sensitive financial information is securely exchanged, helping reduce the potential for data breaches. 

Additionally, solutions like Dwolla decrease the real estate sector's reliance on paper checks and wire transfers, reducing instances of fraud, scams and phishing.

Dwolla In Action

With its unified and robust API solution, Dwolla empowers mid- to enterprise-sized real estate businesses to digitally transform their payments.

Real Estate Platform Delivers Inexpensive, Quick and Reliable Payments

For one real estate platform, the ability to electronically collect earnest money deposits and commissions was critical to meet customer expectations. By implementing Dwolla’s payment API, this platform eliminated the need to manually deliver paper checks and conduct other real estate transactions in person.

The platform even made it possible to switch between Standard ACH and Same Day ACH transfers as necessary. Now, real estate companies, escrow holders and homeowners have access to a quick, safe, reliable and cost-effective payment solution.

Leveraging ACH Payments to Fight Fraud

Traditionally, real estate companies have relied on paper checks and wire transfers to collect and process payments. While quick, wire transfers are also expensive and have become large targets of fraudulent activity. ACH transactions make secure transactions possible, offering a cost-effective alternative to wire transfers and paper checks.

For one real estate fintech, replacing wire transfers with better payment options was the goal. Using Dwolla’s API, they built a tailored platform that delivers fraud protection and a seamless user experience. This allowed the company to securely collect and disburse real estate costs, resulting in more than 120,000 earnest money deposits and $700 million in real estate transactions —with zero incidents of fraud.

The Chief Revenue Officer of this real estate fintech calls Dwolla a miracle solution that solves the payment issues that have traditionally plagued the industry. He says, “A lot of escrow holders today are accepting earnest money payments via a wire, a certified check or a personal check—methods that are riddled with fraud. Our use of ACH transactions via Dwolla is what our industry calls good funds. It’s the best method to transfer funds because it’s safe, secure, trackable, cost-effective, and easy.”

image of a client quote along with Dwolla's API icon.


Dwolla Supports Real Estate Digital Payment Solutions

Nearly 70% of real estate companies have either partially or fully decreased their reliance on legacy technologies, replacing them with modern solutions capable of seamless integration and a range of features required to elevate payment platforms. 

When real estate businesses trade in their manual processes and file-based operations for Dwolla’s modern, streamlined, automated and full-service approach to payments, they unlock the potential for faster payments and innovation.

Dwolla enhances payment security, meets industry standards, increases customer satisfaction, and saves valuable resources company-wide, allowing real estate companies to future-proof their businesses and build stronger relationships.

Ready to get started? Schedule a call with a payments expert today.

 

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