Digital payments firm Dwolla is the latest to want in on the Federal Reserve Faster Payments initiative.
Reports by Forbes Thursday (Jan. 26) said the FinTech company is one of 19 to submit proposals on how to run part of the Fed’s real-time payments network. The Federal Reserve of Chicago, which houses the Faster Payments Task Force, is accepting the submissions and will review the proposals along with experts from McKinsey, reports explained.
The Fed is expected to release a report on these submissions sometime later this year.
Dwolla’s proposal is being submitted just months after the company announced a $6.85 million funding round led by The Foundry Group and Union Square Ventures, reports added. The company has recently shifted focus: Initially, it provided apps but said last November that it would exit the app business and instead develop its own APIs to support bank transfers via ACH.
Reports pointed out that, while banks have joined on in the Fed’s Faster Payments initiative, smaller FinTech startups and innovators are less involved and aware of the effort. Jordan Lampe, director of communications and policy affairs at Dwolla, told the publication that its participation with the Fed’s Faster Payments initiative is a way to encourage others to get involved.
“We’re putting our proposal out there as a way to engage the industry,” he said. “The platform it creates not only improves our proposal but the industry’s collective understanding of faster payments.”
The executive added that the company’s preexisting familiarity with faster payments infrastructure can help the Fed.
“Much to our surprise, simply talking about FiSync with the task force did more to advance the conversation than ever connecting it to and moving money with a bank,” Lampe told the publication. “Despite our decision to stop actively selling FiSync to the marketplace in 2015, we still saw value sharing what we had learned, and contributing the technology to the proposal process became a company-wide priority.”