The low-margin farming industry seems particularly sensitive to credit card transaction fees or the time it takes for checks to clear. That’s why Des Moines, Iowa-based Dwolla, appealing to its Midwestern roots, has started targeting agrarians with its alternative payment service.

Credit card fees are “a lot of money on a $7,000 or $8,000 bill,” says hog producer Carl Blake. “We were losing about a pig and a half of money; then Dwolla comes along and says they’ll do it for 25 cents.”

Blake, president and owner of Rustik Rooster Farms, began using Dwolla recently. The alternative payment method will provide faster sales at higher margins, he says.

“This is the future of monetary movement,” Blake predicts.

That means a lot to Blake, whose business has grown rapidly. His offerings include a re-creation of the Swabian Hall, a 19th century pig considered Europe’s most delectable. He approximates the breed by crossing a Meishan pig from China with a wild boar from Russia.

Another Dwolla customer, AgLocal, started in Kansas City, Kan. The online marketplace connects small farms with restaurants, and counts 40 New York City eateries among its users. It plans to convince more New York restaurants to use its system within the next couple of months, and it wants to reach restaurants in San Francisco and Chicago soon.

So far, AgLocal and its customers use checks, which Naithan Jones, AgLocal CEO, finds inefficient.

With Dwolla, merchants have immediate access to funds instead of waiting two to three days for checks to clear, Jones says. Also, most restaurant retailers won’t accept credit cards because of the fees, he adds.

“We’re finding a ton of adoption anywhere checks are giving headaches and paper cuts,” says Jordan Lampe, communications head at Dwolla.

“Dwolla’s growth in the [community-sponsored agriculture] market has been entirely organic — no pun intended — driven solely on the value proposition we’re bringing to the table,” Lampe says.

Dwolla has been busy creating new landing pages to show niche markets, such as renters, governments and schools, how its payment system can work for them.

“A couple months ago we really decided to buckle-down and begin beefing up the support and education that these emerging channels deserved,” Lampe says.

Dwolla offers several tools designed to integrate quickly and seamlessly with merchants’ systems. MassPay, launched in October, enables users to send money to multiple recipients in batches. Like individual payments, within the batch each transaction of more than $10 costs 25 cents. Any transaction under $10 is free.

Dwolla has approximately 60 agricultural clients, and Lampe says many more individual farmers are also using its system.

While the e-commerce company continues to capture market share in its home state, Dwolla has had some trouble expanding nationwide.

Its Midwest location might make it slower to get mass adoption on the coasts, says Blake. But he says he has no doubt consumers everywhere will catch on eventually.

Dwolla “takes the transaction down from three days to watching it on the [PC or mobile] screen,” he says. “Why would it have to take three days to process a transaction in the age of computers?”


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