Dwolla released Virtual Account Numbers yesterday. This is interesting and beneficial for a number of reasons. One of those reasons is the interoperability VANs enable with the non-Dwolla payment world.
A VAN is a routing number (RN) and account number (AN) combination that is ACH routable. This means you can plug a VAN into any payment tool under the sun and it just works.
Two use cases really stick out as important.
- Businesses can now generate a VAN and plug their Dwolla customer records right into Stripe, Square, Braintree, Adyen, Klarna, Affirm, C2FO, Coinbase, Venmo, Square, $Cash, and on and on. For those of you using Dwolla’s API for payouts, you can just pipe funds right into your Master Balance. No more hops between your other providers or corporate treasury. The time savings here is incredible.
- Developers can now generate a VAN combination for individual business cases. For example, one AN/RN combination can be used for a specific company or product. Now that AN/RN combinations are programmatic, the uses for them are somewhat infinite. Everyone loves a good VC story so what happens when every funding has its own AN/RN combination on an investment platform?
I have no doubt that developers will create far more interesting use cases that I haven’t thought of.
Access continues to evolve.
We’re watching commerce between traditional banking and CeFi innovations coalesce into an incredible opportunity. My hunch is that we’re closer to the beggining of the growth curve than we might all think. FinTechs are just now getting the feature functionality that banks have had all along. It’s not that these capabilities didn’t exist but the point is that FinTech developers haven’t had broad access to them.
VANs evolve the Dwolla platform from closed loop apps into a massive open loop compatible with all the automation the rest of the financial services world has to offer.