In the low-margin farming industry, companies are particularly sensitive to credit card transaction fees or the time it takes for checks to clear. Des Moines, Iowa-based Dwolla, appealing again to its Midwestern roots, has started targeting these industries with its alternative payment service.  

Credit card fees are "a lot of money on a $7,000 or $8,000 bill," says pig farmer 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 enable faster sales at higher margins, he says. "This is the future of monetary movement."

Blake's distribution has grown rapidly. His offerings include a recreation of the Swabian Hall, a 19th century pig rumored to be Europe's most delectable. He creates this 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 restaurants among its end users. It plans to get more New York restaurants using its system within the next couple of months. AgLocal also wants to reach restaurants in San Francisco and Chicago soon.

AgLocal and its customers run on checks, which are inefficient, says Naithan Jones, CEO of AgLocal.

With Dwolla, merchants can get instant 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 be quickly and seamlessly integrated with merchants' systems. MassPay, launched in October, allows 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.

Currently, Dwolla has approximately 50 to 60 agriculture clients using its technology, and Lampe says many more individual farmers also use 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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