Alternative payments company Dwolla took another step into the credit arena this week. Its recently-announced partnership with Alliance Data Systems resulted in the creation of a new credit service called Dwolla Credit.
It previously dabbled in the credit space with the launch of Instant two years ago. Instant is an opt-in feature that, for a monthly subscription of $3, lends users up to $5,000 for one month with no interest.
Through the recent partnership, the Des Moines-based startup will offer consumers and merchants a cardless credit product. Dwolla Credit users can spend advanced funds at any of the 40+ (and growing) ecommerce merchants in Dwolla’s online “Storefront.”
When shopping at participating Storefront merchants, Dwolla Credit users will be able to simply select the “Pay with DWOLLA” button, login, and complete their purchase. Transactions will cost merchants Dwolla’s traditional fee (25 cents per transaction, or free for transactions $10 and under). Merchants will receive funds instantly in their Dwolla account.
Dwolla Credit is currently in beta, but users can request to be put on the wait list. The product will be available to the general public in early 2014.
To learn more about Dwolla, watch its FinovateSpring 2012 demo where it debuted FiSync.