By allowing users to access and send money from their existing bank and credit union accounts, Dwolla is lowering the barrier of entry into the network and helping digitize paper checks.

By creating a Direct account during the first-time payment flow, senders securely wrap their payment information with a username and password and hide bank account and routing numbers from the recipient. Upon return, senders can access and send money directly from their linked bank or credit account by simply entering their Direct credentials.

To create a Dwolla Direct account, simply provide Dwolla an email address and a password. (These credentials will act like a padlock to protect your banking information, not only providing a new layer of security to your checkbook but allowing users to return and easily send payments without re-entering their payment information.) From there, senders are invited to instantly verify their bank or credit union account and complete the payment.

This announcement is especially attractive to small businesses, non-profits, and government agencies looking to replace and digitize their check operations (which may be costing them save the $13.1 Billion). Why? According to the Association for financial professionals, the top 3 barriers to the adoption of electronic payments are:

1. Difficulty convincing customers to pay electronically (cited by 82 percent of survey respondents)
2. Difficulty convincing suppliers to accept electronic payments (74 percent)
3. Shortage of IT resources for implementation (71 percent)

Simply put: people simply do not want to sign up for "yet another account" in order to pay with Dwolla and, if they do, cannot afford the costs of an ACH solution or its IT implementation.

Direct addresses these concerns by reducing the amount of information required, instantly validating senders bank accounts, and cleverly marrying a first-time payment experience with account creatioion (to help create repeat usage). We also baked Direct into our simple 'no tech' payments methods, Form Builder tool, shopping cart plug-ins, invoicing options, or Dwolla Buttons. (we also have a high-tech option with our the Offsite Gateway documentation).

Why are we doing this? The technical, legal, or payment knowledge needed to understand ACH can be daunting and prove to be cost-ineffective. This is a super simple way that SMBs can access and leverage the ubiquity and low-cost of ACH to their business advantage.