BBVA Compass, a leading U.S. banking franchise with operations throughout the Sunbelt region which ranks among the top 25 largest U.S. commercial banks based on deposit market share today announced that its customers will be able to send and receive funds instantly through Dwolla, an all-digital payments network. The offering is made possible through the bank’s use of Dwolla’s secure payments protocol for financial institutions, FiSync, which enables the confirmation of good funds, secure authentication and real-time availability of money to and from the Dwolla network.
The collaboration makes BBVA Compass the largest financial institution to use the Dwolla platform to eliminate the wait associated with the decades-old Automated Clearing House (ACH), where transfers typically take two-to-five business days to clear.
The partnership also marks the debut of FiSync’s pioneering use of authentication and tokenization processes, which remove the need for account holders to provide sensitive bank account information or credentials to Dwolla or any other party it transacts with. Developed jointly by BBVA Compass and Dwolla, these processes are a significant departure from other payments platforms like ApplePay, Stripe or PayPal, where customers must supply their payment information to providers or third parties.
The launch underscores BBVA Compass’ commitment to digital transformation, and signals its clear intent to lead the financial industry into the 21st century.
“Consumers can now get anything on demand — music, movies, services — but the underlying financial transactions can sometimes take days to finalize,” said BBVA Compass Chairman and CEO Manolo Sanchez. “By working with Dwolla, BBVA Compass is ensuring that money is able to keep up with the speed of the instant economy. This will have a real and lasting impact on businesses and consumers alike.”
Real-time transfers with BBVA Compass will be particularly useful for startups, enterprise companies and small businesses looking for a simple, secure and inexpensive way to collect funds, make disbursements or handle B2B payments. Clients of the bank will be able to send in real-time to other BBVA Compass account holders and the Dwolla network — a tangible manifestation of efforts by BBVA Compass and Dwolla to pave the way for payments to reflect the instant economy.
“FiSync’s confirmation of good funds, real-time availability, and 24/7/365 clearing times are exactly the features that U.S. businesses — from startups all the way to large enterprises — need from their financial institutions to keep up in today’s real-time economy,” offered Ben Milne, CEO and cofounder of Dwolla.
The standalone Dwolla network uses new technologies and Internet-connected devices to streamline, modernize and enhance access to the nation’s $34 trillion payments infrastructure, offering individuals, financial institutions, U.S. businesses of all sizes and governments a secure and sensible approach to moving funds. BBVA Compass will maintain Dwolla’s existing pricing for its customers’ real-time transfers — 25 cents per transaction if it is more than $10, or free if less.
Open innovation
Inspired by the open standards that are advancing other industries, BBVA Compass and Dwolla first announced their alliance in October 2014, with the bank becoming the only major bank to open its platform to such an extent to digital developers. The real-time transfer service for BBVA Compass clients is part of the first stage of their agreement.
Another crucial component of this stage of the partnership is its direct appeal to innovators: Any entity or individual with a BBVA Compass account will be able to leverage real-time payments via Dwolla’s existing open platform. Through the use of Dwolla’s available application programming interfaces, or APIs, developers will be able to create their own custom real-time payments applications or business processes.
“FiSync will give anyone with a BBVA Compass relationship a real-time platform to innovate new services, build compelling products or improve existing systems,” Milne said.
By allowing end-users to grant or revoke account access, Dwolla’s secure authentication experience allows them to interact with merchants and applications in a way that is more controlled, secure and seamless than existing payments instruments. Transactions authorized through ACH, for instance, grant recipients direct access to bank accounts, not to mention disclosure of bank account and routing numbers. Consumer groups have called for easier methods of revoking recipients’ account access, and Dwolla’s network allows consumers to authorize and revoke access in a matter of seconds.
BBVA Compass and Dwolla will continue to roll out additional features and updates to their relationship in subsequent months.
“The financial industry is steadily marching toward a real-time system,” Sanchez said. “Both BBVA Compass and Dwolla intend to lead the movement and provide a roadmap for others. Without a doubt, it’s an exciting time to be in banking.”
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