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BBVA Compass, Dwolla Partner on Real-Time Payments

The bank also agreed to open up its technology platform to Dwolla developers.

BBVA Compass and payments technology company Dwolla have entered into a partnership that will allow customers of the bank to use the Des Moines, Iowa, startup’s real-time network to make money transfers.

Further, as part of the agreement, BBVA Compass has opened up its technology platform to Dwolla developers, a move the bank says is inspired by the open standards that have spurred innovation in other industries.

The deal makes BBVA Compass the largest bank to partner with Dwolla, and allows the bank's customers make real-time payments to each other, starting in the first quarter of 2015. Dwolla’s proprietary architecture and tools allow any business, organization, or individual with a US bank account to move money at a flat cost of 25 cents for transactions more than $10, while anything less is free.

As part of the first stage of the agreement, BBVA Compass will utilize Dwolla’s FiSync real-time money transfer system to move funds for BBVA Compass customers to anyone through Dwolla's real-time network. This will be particularly useful for startups, enterprise companies, and small businesses looking for a quick, inexpensive way to handle disbursements or B2B payments, among other things, says BBVA Compass director of business innovation Dave Kucera.

"Being able to move the money in real-time is one key, also being able to pay using a cost structure that is far superior to the traditional payment rails is another benefit," he notes.

Kucera says this move is aligned with the bank's overall strategy of becoming a "bank for the digital age," which was also the impetus for its acquisition of digital bank Simple earlier this year.

"There's so much digital disruption out there," says Kucera. "We identify these disruptors and instead of thinking of them as competitors, we try to collaborate with them."

Dwolla has said in the past it sees its FiSync protocol as a more efficient replacement for the longstanding ACH network. Dwolla CEO Ben Milne says this partnership now makes that a reality.

"At a time when everyone is wondering how can we get to real-time, we're offering something that's available today -- through BBVA Compass -- and not talking about something years in the future."

BBVA Compass and Dwolla will continue to roll out additional features and updates to their relationship in subsequent months, both parties said.

This announcement comes just more than a week after The Clearing House, a payments company and trade group representing 24 of the nation's largest commercial banks, said it plans to create a real-time payment system.

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

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User Rank: Author
10/30/2014 | 9:18:57 PM
Re: RTGS Exclusivity?
The decision to open up the platform to developers is an encouraging sign that BBVA Compass, and maybe others in banking, are starting to adopt more of the Silicon Valley-type of thinking where this kind of non-proprietary approach is valued, as opposed to the long-standing, proprietary, "Not invented here" kind of thinking that has prevailed in banking. Greg MacSweeney has made a similar observation regarding BNY Mellon's Silicon Valley-based Innovation Lab.
Greg MacSweeney
Greg MacSweeney,
User Rank: Author
10/30/2014 | 4:13:37 PM
Re: RTGS Exclusivity?
Yes, that's a pretty big deal for Dwolla. And an interesting move for BBVA.
User Rank: Author
10/30/2014 | 3:14:47 PM
Re: RTGS Exclusivity?
Thanks for your question Darren. I'm actually not sure, but will endeavor to find out.
User Rank: Apprentice
10/30/2014 | 2:44:45 PM
RTGS Exclusivity?
Do you know if Dwolla had BBVA sign an exclusive agreement, similar to CurrentC and the CurrentC members?

I would think a large bank would want to have more than one RTGS partner, to increase opportunities for customers to move money between multiple banks.    But kudos to Dwolla for signing a large business.
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