Dwolla Connects Account-to-Account Offering to FedNow Service

Account-to-account payment solution Dwolla is now connected to the FedNow® Service.

The company added the Federal Reserve-run instant payment service into its platform through its banking partner, according to a Tuesday (July 29) press release.

Dwolla debuted its real-time payments option via The Clearing House’s RTP® network in April 2021.

“Instant payment coverage is key for businesses aiming to optimize cash flow and operational efficiency,” the release said. “By supporting FedNow transactions, Dwolla nearly doubles the number of financial institutions reachable via instant payment rails, allowing clients to send payments within seconds to a broader network. Additionally, Dwolla’s orchestration technology checks accounts for instant payment eligibility and routes payments through either RTP or the FedNow Service, eliminating the complexity of managing multiple networks.”

Reed Luhtanen, executive director and CEO of the U.S Faster Payments Council, said in the release that Dwolla’s connection to both FedNow and the RTP network marks a “significant step toward realizing the full potential of faster payments in the United States.”

Dwolla’s new effort came as 58% of financial institutions in the United States that enable instant payments do so through both FedNow and the RTP network, according to the PYMNTS Intelligence report “Doubling Down: The Growing Case for Multi-Rail Real-Time Payments.”

This shows that “the multi-rail approach has become the norm rather than the exception in real-time payments,” the report said. This marks a shift from the earlier opinion of many financial institutions, which “saw the choice between the two rails as a key barrier preventing real-time payment adoption.”

The report found that banks are using the distinct capabilities of the two networks. The RTP network supports transactions up to $10 million, while the FedNow Service increased its cap from $500,000 to $1 million this summer.

The difference in transaction limits, along with the RTP network’s lengthier operational history and higher daily payment volume (1.2 million versus FedNow’s 14,500), illustrates how marrying the two services lets financial institutions meet a broader range of customer needs, the report said.

“Beyond these statistics, the report emphasizes that a multi-rail strategy increases resilience, providing backup and continuity that minimizes disruptions and strengthens operational integrity,” PYMNTS wrote June 27.