Investing is all about timing and control. Knowing when to exit or enter a position can be the difference in large profits or small, incremental gains. Being able to act on these instincts requires using a platform that avoids manually-intensive processes and payment methods.
As a way of improving the user experience on the platform and getting more control over the actual transfer of funds, whether it’s for making an investment or receiving a dividend, investors are leaning towards platforms offering account-to-account transactions. Compared to other types of payments, account-to-account transfers can be completed in hours and come with a much more compelling fee structure for the platform and end user. Funds can be withdrawn and reinvested within the same business day—capitalizing on market updates and not sacrificing security.
- Identify Your Funds Flow
- Sophisticated Funds Flow Using Same Day ACH + Digital Wallet
- Example of Art Investment Platform Using Dwolla
This playbook illustrates how investment platforms can offer account-to-account transfers with a Dwolla API integration. If you need a mobile payment service or are trying to identify the payment rails that are best for this industry, consider the different ways to use the Dwolla API to take advantage of account-to-account payments for investment platforms.
Identify Your Funds Flow
What makes Dwolla’s technology unique is the flexibility to configure it for a variety of funds flows with different payment speeds and customer types. Before solutioning for faster payments, first determine what functionality your end users will require.
As a mobile payment service for an investment application, will your end users want transaction limits larger than $5,000 a week? Do you want your users to have a digital wallet to hold funds within your application or platform? Have you considered the user journey?
That all sounds a bit daunting until you realize the Dwolla API integration answers these questions.
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Sophisticated Funds Flow With Same Day ACH + Digital Wallet
While your senior engineers build the next platform for investing, what’s important to you is making sure those investors have funds readily available to invest. With a Dwolla API integration, you’re offering a mobile payment service that blends seamlessly into your existing platform.
For example, consider the Koala Investment Platform. By integrating the Dwolla API, end users on the Koala Platform will be onboarded as a Verified Customer within the API. After attaching a bank account and completing the verification process, these verified users will receive a Balance that can be used to hold funds like a digital wallet.
The verified user then authorizes the Koala Platform to debit their attached bank account and load the funds to the digital wallet on the Koala Platform. This transaction is a Next Day ACH, with funds arriving by the next business day in the wallet.
When the funds become available in the Balance, the verified user is ready to initiate a Same Day ACH transaction to send an investment to the Koala Platform whenever the right investment pops up.
Koala, as the investment platform using Dwolla as its payment provider, is able to automate these transfers and send notifications to all parties involved. As activity occurs on the platform, the Dwolla API sends webhooks in real time.
“With just a few clicks, ACH payments are sent to investors based on timing parameters established by the sponsor. Using InvestNext means no more manual calculations. The platform automates complex waterfall distributions, saving investment firms time and resources.”
Co-Founder and Chief Product Officer of InvestNext
Example of Art Investment Platform Using Dwolla
Consider how an art investment platform was able to scale payment volumes by 200% and facilitate $40 million a month on its platform.
For the platform’s end users, having the ability to make a quick and easy investment is a significant step in making art acquisition more accessible. And for the company, the flexibility and ease of account-to-account payments with Dwolla means there is little to no intervention from their engineers.
This innovative platform uses standard ACH transaction timing not only as a check against fraud and a cost-effective transaction type but also as a peace-of-mind payment method that lets them know how much money is in the bank and when it will arrive. The company has prioritized implementing robust Know Your Customer (KYC) processes and, with the help of third-party account verification providers, enjoys a return rate of less than one percent.
“Having any friction or delay while waiting for funds to clear via manual payment processes, sometimes a matter of days or weeks, can create a lot of user experience problems. With Dwolla, we don’t see those problems.”
Co-Founder of Masterworks
For faster payments like Same Day ACH and Real-Time Payments and higher transaction limits for end users investment platforms can tailor Dwolla’s solution to automate transactions based on timing, fixed contribution amounts and account minimums or maximums.
As you build your own investment platform or reconsider how your company is moving money, reach out to our team and let’s talk through your potential use case.