Collecting payments from clients can really be a cumbersome process, wrought with friction. Everything from creating an invoice, sending it, waiting for a check, making sure it is the right amount and then hoping that it clears takes a lot of time, resources and energy - and time is money. On top of that, accepting credit cards for invoices leads to interchange fees, which can really take a bite into the profits of a small company and their bottom line.
GoDaddy recently partnered with Dwolla to reduce the pain for its SMB clients. As a Dwolla spokesperson explained, the partnership let “GoDaddy's product team plug into our network, with little to no support from Dwolla personnel, and provide their customers a drastically cheaper way to collect payments.”
Recognizing that 2.9% plus 30 cents per transaction on a small transaction is too costly for many SMBs, Dwolla created a payment network that attaches to a customer’s bank account and charges only 25 cents per transaction, regardless of size. The solution also turns the 70% of invoices that come in on paper into digital payments.
“Very small businesses have a real need for easy payment, particularly those that accelerate cash flow. By using Dwolla, they can replace the onerous process of checks with a quick and easy solution.“ says Mandar Gokhale, Director, Product Management for GoDaddy.
Although signing up for a Dwolla account can be completed in a matter of minutes, signing up for an account can be a point of friction for many small businesses and their vendors. To address this issue, GoDaddy created a one-step process that allows its customers to begin e-invoicing and collecting Dwolla payments instantly without needing to register for a free Dwolla account. When an invoice is paid customers are invited to register for a Dwolla account but it is not mandatory. GoDaddy’s solution also lets the SMB’s customers pay via e-check if they do not have a Dwolla account, which keeps the invoice digital and reduces floating checks and invoices.
GoDaddy’s Gokhale regards this service as an important breakthrough for SMBs, commenting that “from an industry perspective, taking payments at the beginning of the last decade involved a lengthy merchant account signup, fees to setup and maintain an account and unclear pricing. Then came along companies that made it drastically easier to get started and paid online and with clear pricing. Other mobile payment solutions started and pushed it further in the mobile world. In the evolution of payments, this step further reduces friction and brings the cost down significantly.”