Dwolla Raises Stakes with PayPal Introducing MassPay

by Mercator Advisory Group 0

Dwolla recently announced it is now letting customers pay up to 2,000 people through its service in a matter of a few clicks. MassPay, Dwolla’s response to PayPal’s Mass Payment, enables customers to upload a CSV file with just two columns, one for the amount you with to pay and the other with either the recipient’s email address, phone number or Dwolla ID.

To encourage users to use MassPay, Dwolla is refunding all fees incurred in the first five transactions until the end of November. Following the end of the trial period, however, it is expected that the fee structure will closely resemble cash payments network, with no fees for transactions under $10 and just $.25 for every transaction over that amount. If the MassPay fee structure closely resembles the cash payments network, MassPay will be able to build upon its price advantage over PayPal, which charges 2 percent for everything, with a maximum charge of $1 per transaction.

To date, MassPay has two direct advantages over PayPal’s Mass Payment: it allows payments up to 2,000 people versus 250 for PayPal and the fee structure is also more competitive. Dwolla has said the creation of the MassPay service is based on customer recommendations and has partnered with 10 other players (Parking Panda, Getaround, Flashnotes, Fancy Hands, Major League Gaming, Splash, VHX, HTML5.com, Webmasterchecks, and Scripted) to provide the most complete service available. Whether or not this is a sustainable business model is yet to be seen, however it certainly puts the ball squarely in PayPal’s court.

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