Look out, PayPal: there could be a new king in the mass payments industry.
Dwolla, the startup payments network that aims to offer relative low fees for transaction processing, has launched a new “MassPay” feature this week. Targeted at business customers, MassPay allows businesses to pay up to 2,000 people at once, and bills itself as faster and simpler than check writing or wire transfers.
As exciting as the sheer volume of people MassPay allows to be paid at once is its Dwolla-based price point: a $0.25 fee per transaction over $10, and no cost to complete transactions of $10 or less.
When you compare those features to PayPal’s “Mass Payments” option, the picture isn’t pretty for eBay’s bread-and-butter payments platform. Mass Payments supports just 250 recipients at a time, and charges 2 percent for any payment over a dollar.
As Tech Crunch points out, PayPal’s lone remaining advantage is that it offers an API for its web upload function, which can limit the amount of manual labor needed.
Dwolla currently has 10 partners for MassPay, including companies such as Major League Gaming, Getaround and VHX, so the feature may initially be targeting startups and small businesses.
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What do you think? Can you see Dwolla cutting into PayPal’s space? Are Dwolla’s low rates enough to attract customers? Tell us in the comments below.
