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BBVA, Dwolla team up to offer real-time payment innovation to U.S.

BBVA Compass today announced an agreement that opens its technology platform to payments innovator Dwolla, allowing customers of the bank to use the Iowa startup’s real-time network to make money transfers.

The deal makes BBVA Compass the largest bank to partner with Dwolla, a nimble alternative to the current payments networks that are decades old in some cases, far from real-time and more expensive to use. It also makes BBVA Compass the only major bank to open its platform to such an extent to digital developers like Dwolla, its first such move inspired by the open standards that pushed forward other industries. BBVA Compass sees the agreement as indispensable and timely given its transformation to a digital bank amid rapidly changing consumer habits.

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Dwolla partnership will allow for @BBVACompass account holders to make real-time payments to each other

“We've set our minds on being the best bank in this digital century, and we believe strongly that the best way to get there is to combine our in-house capabilities — our real-time core banking platform, for one — with startups whose very existence is designed to redefine the financial services industry,” said BBVA Compass Chairman and CEO Manolo Sánchez. “Dwolla, and its real-time payment infrastructure, is leading the modernization of the payment process, and we expect their technology to accelerate our own vision for banking in the digital age.”

The partnership will allow for BBVA Compass account holders, in the first quarter of 2015, to make real-time payments to each other in a way that's safe and as fast, direct and transparent as email. Dwolla’s proprietary architecture and tools allow any business, organization or individual with a U.S. bank account to move money at a cost that cannot be matched by traditional networks (transactions more than $10 cost a flat fee of 25 cents, while anything less is free).

In the first stage of the agreement, BBVA Compass will use Dwolla’s FiSync protocol designed especially for banks and credit unions to move funds for BBVA Compass customers to anyone through Dwolla's real-time network. This will be particularly useful for startups, enterprise companies and small businesses looking for a quick, inexpensive way to handle disbursements or B2B payments, among other things. BBVA Compass and Dwolla will continue to roll out additional features and updates to their relationship in subsequent months.

“As new technologies push the limitations of the existing batch payment infrastructure and federal level initiatives champion the call for real-time payments, it’s the financial institutions that are working to bring true streaming payments to their clients, today, that will have the competitive advantage tomorrow,” said Dwolla CEO and Founder Ben Milne. “BBVA Compass shares Dwolla’s vision for a modern payment infrastructure — one that helps financial institutions and their account holders create new products and services, streamline and improve business processes, and stay relevant in an increasingly digital and customer-centric landscape.”

With venture backers like Andreessen Horowitz and Union Square Ventures, as well as strategic investors, like CME Group, Dwolla is looking to help transform payments and money movement, and is partnering with forward-thinking financial institutions to realize the vision. BBVA Compass in 2012 invested $362 million in a technology platform that allows for real-time banking.

BBVA Compass and Dwolla will be attending the Money 2020 conference next week in Las Vegas, where they will be discussing the alliance.