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Dwolla builds reliable software that businesses are using to automate their payment processing. By integrating Dwolla’s payment API, a business can connect their application or website to the ACH Network and RTP® Network to enable faster payment functionality.

If your job pays you by direct deposit, if you pay a regular bill through a service connected to your bank account or if you’ve paid a friend through a mobile payment service, you’ve probably used the ACH or RTP® Networks. Today, businesses are using software to connect with these networks and offer payments as a service.

Real-time payments are similar to ACH payments in that funds are sent between bank accounts. The key differences are that RTP® transactions are sent individually and electronically, while ACH transactions are batched and can be submitted manually. The irrevocability of a real-time payment enables the immediate, final settlement to the payee compared to the ACH return process with the ACH Network. 

The ACH Network has been in place for almost half a century while the RTP® Network is a new payment rail created by The Clearing House that hasn’t been adopted by every eligible financial institution

Dwolla helps businesses access these payment rails through one seamless integration with a payment API, with the help of our financial institution partners (who perform all the funds transfers initiated using our technology).

Businesses that choose the reliability and speed of ACH or RTP transactions for their application must have a connection to the networks themselves or to the financial institutions that already work within these networks. Dwolla has established these connections and built a robust payment API around those connections to easily automate payment processing.

We’ve weighed the pros and cons of each option in our guide, Comparing a Payments Provider vs. Handling Payments In-House.

That’s where Dwolla comes in, with reliable software to automate payment processing. Enabling reliable payment processing for your business payments means spending less time managing your payments and more time focusing on the business. And with the Dwolla Platform maintaining a 99.9% uptime, our payment software is virtually always in operation, giving your business more confidence to initiate digital transactions. 

10 Steps to Sending a Payment

Explaining the RTP® Network 

The RTP® Network from The Clearing House is a real-time payments platform that launched in 2017. Today, the RTP® Network is accessible to financial institutions holding 73% of U.S. demand deposit accounts. 

The Clearing House’s RTP® Network delivers real-time payments for several use cases:

    • B2B payments (Paying a supplier in real-time).
    • B2P payments (Insurance company issuing a reimbursement to a policyholder).
    • Payroll (Transactions can be sent the day of, not scheduled days in advance). 
  • Requests For Payment (Your company receives a partial payment with insufficient detail for reconciliation).

Scenarios like these usually trigger a phone call and require work outside of the payment system. Money sent via the RTP® Network is available to the receiver in seconds. At Dwolla, we are particularly excited about the RTP® Network’s good funds model and technical infrastructure for disbursements. 

Combining the two creates a payment solution that’s truly “always on.” 

Real-time payment credits are initiated and processed within seconds. Sending a payment in real time provides both parties involved with finality of funds, because RTP transactions are irrevocable. 

View RTP® Network coverage by state.

Explaining the ACH Network

Last year, more than $61 trillion moved along the ACH Network through 26 billion ACH credit and ACH debit transactions. 

ACH bank transfers are a reliable way to initiate a digital payment because rather than use a paper check to carry necessary—and private—information, ACH transactions are transmitted electronically. Businesses who enable reliable payment processing software can save money on transaction costs because of the low transaction fees associated with the ACH Network and bank transfers. 

A single ACH transaction can cost pennies to complete.

ACH transactions are governed by both Federal Reserve Bank regulation and rules established by Nacha, the National Automated Clearing House Association, who oversees the network.

According to Nacha, the ACH Network processes two types of transactions:

  • Direct Deposits via ACH are the use of funds for payroll, employee expense reimbursement, government benefits or tax refunds.
  • Direct Payments via ACH are the use of funds to make a payment.

When making a reliable ACH payment, the payment can be either an ACH credit or ACH debit:

  • A direct payment processed as an ACH credit pushes funds into an account (payroll).
  • A direct payment processed as an ACH debit pulls funds from an account (bill payment).

Both ACH debit and ACH credit transactions can be settled in one or two business days.

View Dwolla’s Payment Processing Timelines

Payments as a Service

Businesses in a variety of industries are understanding how they can benefit from reliable payment processing software. Whether you are a real estate transaction coordinator helping homeowners refinance, an insurance agency needing to streamline disbursements to policyholders or a marketplace with substantial interchange fees looking to improve its margins, Dwolla’s payment API offers more affordable payments with simplified access to these payment networks.

This pet insurance company was spending four hours each day issuing checks to policyholders until they started offering bank transfers as a reimbursement option. Adoption skyrocketed. Policyholders choosing ACH are receiving their reimbursement five days faster compared to using a check—in addition to saving the company thousands of dollars by using reliable payment processing software instead of growing its head count. 

Rally, an online marketplace providing accredited and non-accredited investors opportunities to purchase shares in rare, collectable cars or memorabilia, sell shares typically between $10 and $200. Not wanting to send their users to a third party, the company needed reliable software to automate payment processing, with low transaction fees. All while keeping their branding at the forefront.

“We didn’t want a solution where we are driving people to somebody else’s product,” says the CEO of Rally. “Having control of interactions ourselves and being able to integrate with a provider like Dwolla that lets us own that component of our business—but has seamless tech and transactions in the background—was a much better fit for us.”

Read More Case Studies

ACH Returns

As we mentioned above, one of the key differences between ACH and real-time payments is the return process.

Having a reliable payment integration can help automate the process that takes place if one of your transactions receive an ACH return code. The ACH Network supports the ability to return entries for specific reasons—such as if the transaction was not properly authorized or has inaccurate information. These transactions are referred to as ACH returns.

The financial institution that originated the transaction is then responsible for providing the proof of authorization; if that can’t be provided, it ultimately ends up in an ACH return. Businesses that integrate with Dwolla’s payment API can take advantage of additional integrations within the Dwolla Platform to help you decrease the chance of ACH returns. 

Real-time payments on the other hand are much like cash transactions—only digital. Once a real-time transaction is initiated, it becomes irrevocable. 

With Dwolla, businesses can automate payment processing with reliable bank transfers. Integrate with Dwolla to connect with the U.S. banking system to further scale your business.


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