Dwolla is dumping its transaction fees to instead focus on making money from added features, services and custom software. It's a business model that others have tried before with mixed results.

But in Dwolla's case, there isn't as much at stake. The company traditionally charged a fixed $0.25 to execute transactions greater than $10 directly between bank accounts. Transactions under $10 have always been free.

Other companies, such as Square and LevelUp, experimented with alternative business models only to find that merchants preferred the simplicity of paying a fee per transaction. In Square's case, the company placed restrictions on which merchants qualify to pay a flat monthly fee instead of a per-transaction fee; in LevelUp's example, its "Interchange Zero" pricing focused on marketing services instead of payment processing.

"Our core belief is the features that are built on top of the network are more valuable than the transactions," said Ben Milne, CEO and founder of Dwolla, who said the company has been "quietly" providing certain services to specific clients for years, and will now make these features available to other members of the network.

One of Dwolla's add-on services is a method for sellers to charge their own custom fees. Other fee-based services include priority user support and the ability to manage multiple payment streams on a single Dwolla account. The company has also asked developers and other users to suggest services they would buy under the new pricing structure. Dwolla's application programming interfaces, which developers use to build apps, will remain free. Dwolla also offers monthly packages based on various tiers of service and products.

These features are for more advanced needs, and picking a package is not necessary for smaller companies and most use cases, Jordan Lampe, Dwolla's communications director and director of policy affairs. Dwolla can also customize its services for unique uses cases, Lampe said.

Dwolla is basing its new strategy partly on models from outside the U.S., such as the U.K. and national "real time" payment systems in countries like Japan. The trend is to move away from extracting fees and other barriers to entry, and to instead focus on using digital payments with shorter processing times and open development platforms as an enabler of business innovation, Milne said.

Dwolla recently partnered with BBVA to build services around faster payments. Banks that have modernized core processing systems that can constantly process transactions, rather than using scheduled bulk batch processing, can use Dwolla's technology to enable real-time or faster payments, which in turn can enable services geared toward online and mobile commerce.

"We're looking at what the alignment looks like with current and future banking partners, and we're looking at faster payment systems developing in other countries," Milne said.

Other companies, such as Ashe Pay, us a similar model to Dwolla. Ashe Pay charges a monthly fee, but does not charge transaction fees.

Altering its business model is necessary move for Dwolla, said Gareth Lodge, a senior analyst at Celent. "With real-time payments around the corner—and with the ability to create multiple aliases, such as paying different phone numbers, email addresses and account numbers—networks that charge the sender without providing additional value will find life increasingly tough," Lodge said.

The trend is to focus on which party is getting value from the payment, and what other services have benefits to that party, Lodge said.

"What is interesting is that the paid services are pretty much what a bank charges merchants for, too," Lodge said. "Just because business models are old, it doesn't necessarily mean that they're broken."

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