State Partners with Company to Pay Bills Online

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By Aaron Hepker

DES MOINES, Iowa (AP) — An Iowa tech company will soon provide a new online payment option to some state taxpayers.

Gov. Terry Branstad announced Tuesday that Des Moines-based Dwolla will be offered as a way for about 50 businesses to pay cigarette taxes.

Dwolla lets users transfer money or pay for things through their smartphones or online for a flat fee of 25 cents per transaction. Those 50 businesses — manufacturers and distributors of cigarettes — pay more than $100 million in cigarette taxes annually, and all transactions are currently done on paper.

"Dwolla is an Iowa startup with tremendous potential," Branstad said Tuesday.

State officials hope to eventually expand the number of taxes that can be paid through Dwolla. There are online options already in place to pay some state taxes, which will remain available. About 60 percent of individual income taxes are paid online, said Iowa Department of Revenue Director Courtney Decker.

Dwolla founder Ben Milne says his company offers lower fees and more security than other options. The company was founded in 2008 and employs about 30 people in Des Moines, Kansas City, Mo., and New York City. It has about 200,000 account holders and processes over $1 million in transactions each day.

This is Dwolla's first partnership with a government. But Branstad said he was hopeful that county and local governments in Iowa would consider using the service.

"We want to lead by example," Branstad said.

Dwolla will not get any state funding for this effort ,but will receive the fees collected from transactions.

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