Derivatives markets operator CME Group Inc (NASDAQ:CME) has announced a commercial agreement with Dwolla, a modern bank transfer platform. The arrangement will offer Dwolla’s real-time architecture to facilitate on demand payment capabilities for clearing and settlement, as well as streamline payment operations for CME Clearing members and clients.
The first application of Dwolla’s technology will be applied to CME Group’s Broker Payment Systems and Give Up Payment Systems and will enable customers to process payments more quickly and cost efficiently.
This is the first time Dwolla has been applied in the exchange space.
Sunil Cutinho, President of CME Clearing, said of the agreement:
With its established customers and proven real-time systems, Dwolla’s technology provides CME Group with an innovative platform to deliver secure and sophisticated payment services to our clearinghouse member firms. As we continue to explore additional applications of Dwolla’s technologies and the resulting efficiencies to be gained, we are pleased with the immediate value we will deliver to our clearing members.
Note that CME Group is also a strategic investor in Dwolla through its investment arm, CME Ventures.
“CME Group has helped Dwolla bring real-time technology to the derivatives industry to enable faster access to liquidity and funding for the industry,” said Ben Milne, CEO and founder of Dwolla.
Aside from traditional bank transfers, Dwolla’s network provides financial institutions with a real-time payments platform with its proprietary protocol, FiSync. Live since 2012, the secure connection provides banks an interoperable private-by-default ledger and mechanism that enables real-time clearing and settlement services, specifically the confirmation and availability of good funds.