Dwolla Revisited with Dave Glaser | E312

The leader in B2B Payments

In this episode of Fintech Impact, host Jason Pereira interviews Dave Glaser, the CEO of Dwolla, a leading digital payment solution that empowers third parties to offer streamlined and unified payment processing services. Dwolla's innovative platform facilitates efficient and secure digital transactions, revolutionizing the way businesses handle payments.

Episode Highlights:

  • 00:33: Dave describes Dwolla as a leader in B2B enterprise account-to-account payments. He shares insights into Dwolla's origin, tracing back to its founder, Ben Milne, over a decade ago.

  • 02:25: Dwolla's strategic shift is discussed, emphasizing the transition from consumer-focused payments to providing API solutions for fintech businesses and digitally transforming enterprises.

  • 05:36: Dave delves into the global theme of account-to-account processing, highlighting its rapid adoption in the U.S. This period coincided with the rise of fintech and the increased need for remote access to funds, especially during the COVID-19 pandemic.

  • 07:30: The conversation touches on Dwolla's evolving responsibility, moving from a B2C to a B2B provider. Dwolla now focuses on servicing businesses that interface with millions of consumers in their networks.

  • 08:17: Dave acknowledges the surface-level differences between the U.S. and European models, highlighting Europe's regulated approach to level the playing field dominated by card brands. He discusses the regulatory standards created in Europe, contrasting it with the U.S. innovative model and the challenges presented by the 50-year-old ACH system in the U.S.

  • 10:23: Dave explains the similarities in the drivers behind the importance of account-to-account payments and open banking in both regions, emphasizing that the U.S. is catching up fast and is on a path towards a similar point.

  • 11:25: Dave agrees with Jason's assessment, tracing the history of the ACH system and its evolution as money became more digital. He highlights the continuous innovation, from mainframe connectivity to modern cloud-based systems and mobile apps, democratizing access to exchanging money.

  • 12:54: Jason invites Dave to discuss Dwolla's trajectory, asking about where Dwolla has been, its current state, and its future direction within the context of open banking and evolving payment methods.

  • 13:36: Dave explains the significance of businesses digitally transforming their systems, processes, and moving to modern app-based, cloud-based systems. Dwolla aims to provide account-to-account solutions, emphasizing their lower cost, speed, and competitiveness compared to traditional methods.

  • 14:17: Jason highlights the friction faced by smaller-sized businesses and banks processing ACH transactions, where fees for ACH work have become a profit center. He seeks Dave's insights on the challenges of breaking through this friction and whether leaders or laggards will drive change.

  • 16:17: Dave delves into the motivators for banks, stating that deposits are the primary source of revenue, guiding banks in their decisions and incentivizing their actions. He emphasizes that while banks add value-added services, deposits remain the core focus.

  • 18:30: Dave introduces the three pillars of open banking: banks, money movers (API processors like Dwolla), and data aggregators or open banking facilitators (e.g., Plaid, Finicity, Tink). He highlights the importance of these data aggregators in providing access to information about bank accounts.

  • 19:07: Dave emphasizes Dwolla's focus on bringing together traditional ACH tools, faster payment methods, and open banking tools through their platform. He teases upcoming announcements in 2024 about Dwolla's approach to providing a comprehensive suite of open banking and embedded finance tools, positioning Dwolla as a one-stop-shop for B2B companies.

  • 21:05: Dave identifies competition as the most significant challenge, emphasizing the fierce competition in the payment space. He highlights the necessity for efficiency, focus, strategic hiring, partnerships, and optimal resource utilization in the face of strong competition.

  • 22:42: Dave expresses his love for the payments industry, citing his extensive experience spanning over 25 years. He recounts his journey from CyberSource to Visa, MasterCard, and now Dwolla, emphasizing the excitement of working with smart individuals, tackling challenging problems, and contributing to innovations in the payments landscape.

Key Points:

  1. Dwolla is a leader in the United States for B2B enterprises processing account-to-account payments, with a focus on providing efficient and low-cost solutions for consumers and small businesses.

  2. Over the years, Dwolla has pivoted its focus from providing payments for consumers and small businesses directly to offering its API for the banking network.

  3. Dwolla is adapting to the evolving trends in the industry by focusing on providing faster payment methods and open banking tools through its platform.

Tweetable Quotes:

  • "Banks are primarily driven by deposits. Deposits are always at the core for banks and the way they think about things." - Dave Glaser

  • "Competition in the payment space is fierce. Start-ups in this space have to be very efficient, very focused, very driven." - Dave Glaser

  • "I get to bring account-to-account payments and open banking innovations to the US. I can't wait to get out of bed every day to do it." - Dave Glaser

Resource Mentioned:

Fintech ImpactJason PereiraFintech