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SYS-CON MEDIA Authors: Pat Romanski, Jason Bloomberg, Liz McMillan, Elizabeth White, Dana Gardner

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Dwolla Reveals Cost of Checks for Small Businesses at $13.1 Billion, Speeds Up Bank Transfer Times to Next Day

Payment Network Cuts Wait-Time in Half to Expedite the Death of Checks, Improve Cash Flow and Get Paid Faster

DES MOINES, IA -- (Marketwired) -- 05/29/14 -- Dwolla, the payment network that allows anyone in the United States connected to the Internet to send, request and collect money, today revealed key numbers and trends related to the cost of writing and issuing checks for small and medium-sized businesses (SMBs). The findings, which combine industry and survey data, suggest that 66% of the nation's SMBs spend $858 a year on maintaining paper check operations, including labor, supplies, maintenance, and wait-times. To entice SMBs to replace check operations, Dwolla has launched Next Day Transfers, which improves bank transfer speeds in and out of the network to as little as two to three business days, and a Business Payments Toolkit, which helps small businesses simply and easily convert to digital.

"Small businesses are writing a $13 billion check each year for a paper-based process that does nothing but hurt their bottom-line and, arguably, keep the United States Postal Service afloat," said Anne Driscoll, Vice President of Marketing at Dwolla. "Issuing paper checks is an old and manual process that clouds a business's ability to make real-time decisions and get paid faster, but existing platforms have been too expensive and complicated to set up and integrate for the small or non-tech businesses."

In a simple, yet compelling infographic, the payment network profiles today's average business owner to give us insight into the real cost of checks:

  • Generation tech: Men (56%) and women (60%) under 30 prefer digital payment options; while those over 30 prefer writing checks (men 66%, women 59%).
  • Lost investments: Nearly 18% of people spend $100 or more on the materials needed to write and issue checks. What could you spend in a year if you bypassed writing checks?
  • Maintenance request: 17% of people spend at least 5 hours or more each month to maintain check operations.
  • For women, family comes first: 25% of women would rather spend time with their family instead of writing and issuing checks; men would spend more time closing deals (30%).

Also Introducing, New Faster Payments with Next Day Transfers
Delivering on its promise to bring faster access of funds to members, Dwolla now allows transfers in and out of its network in as little as two business days.

  • Three-times faster deposits to Dwolla: Businesses, nonprofits, and government accounts may now qualify for access to Next Day Transfers, providing nearly 3x faster funds from a bank account to Dwolla. Apply at http://nextday.dwolla.com.
  • Next Day withdrawals to banks: The payment network has also improved bank transfer out of the network for all of its users, allowing individuals, marketplace sellers, and business vendors to move funds to their bank or credit union, as soon as next day.
  • Dwolla to Dwolla: Still instant.

"The automated clearing house (ACH) plays a critical role in processing tens of trillions of dollars to settle payments made via checks, debit cards, and even credit card payments, but it's often seen as slower than alternatives and harder for SMBs and consumers to use daily," said Ben Milne, CEO and founder of Dwolla. "Dwolla helps anyone tap into ACH's strengths, like ubiquity and low-cost, while providing easy-to-use tools, the same next day speed the biggest businesses get access to, and new security measures, like tokenization, to help modernize ACH."

Toolkit: Replace the check
Unlike ACH or Direct Deposit processors, which can be restrictive, confusing, and cost-prohibitive for many SMBs, Dwolla provides organizations and individuals with free turnkey solutions to send and collect money from existing checking accounts or Dwolla balances. To help small businesses convert to digital, the company has bundled its benefits and tools in its new Business Payments Toolkit.

  • Cheaper than a stamp: No setup fees or monthly subscriptions, just 25¢ per transaction or free for transactions $10 or less.
  • Replace the checkbook with a spreadsheet or an API: Distribute thousands of payments in seconds, by simply uploading a CSV list of emails and payment amounts to the free Dwolla MassPay tool or get technical and customize a solution with the MassPay API.
  • Save a trip to the bank: Use Automatic Withdrawal to send funds to your bank as soon as they hit your Dwolla account, or keep a balance and make real-time payments within the network.
  • Retire the mailbox, the postman: Create free custom web pages or buttons to collect or request payments from anyone with a checkbook, no technical expertise or trips to the mailbox required.
  • Protect your bank information: Unlike a paper check, Dwolla never reveals bank account and routing numbers to recipients.
  • A checkbook that talks: Live support via phone and email with friendly Iowans who actually want to help you.

About the Dwolla Survey
Dwolla commissioned SurveyMonkey to conduct an online survey of 700 SMB business decision makers in the U.S. The survey was conducted between April 23 and April 30, 2014.

About Dwolla
Dwolla allows anything connected to the Internet to move money as quickly, safely, and at the lowest cost possible. Powered by an accessible web-based platform and its "free or 25 cent flat-fee" per transaction pricing model, the software uses the Internet to securely link mobile phones, computers, social communities, and even physical locations to create a safe network that bypasses traditional card and check systems. This allows friends, families, businesses, even governments to easily send and receive digital payments with one another, like cash, but with easy to use websites, apps, and tools and without the fees and constraints of traditional debit and credit cards.

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