The state's relationship with the three-year-old Des Moines-based Dwolla online and mobile payments network is expanding.
Iowa announced its first partnership in January 2013 when it allowed retailers to use Dwolla for cigarette stamp taxes.
On Monday, Gov. Terry Branstad announced the state will expand the partnership to allow customers of the Iowa Department of Transportation to pay fuel tax and vehicle registration costs online using the low-fee service.
Dwolla users are charged a 25-cent fee for transactions of $10 or more. All other payments are free.
"Nearly 7,000 motor carriers in Iowa have been able to complete IFTA and IRP paperwork online for several years, but they have not been able to complete the payment portion of the transaction online," Iowa DOT Director Paul Trombino said. "That was causing many of them to continue to file paper returns, which have a greater opportunity for errors.
"With Dwolla, the entire transaction can be handled online. We think using Dwolla will reduce the number of errors and streamline the filing process for these transactions.”
Receiving the documents online will help the DOT process the returns much more quickly and efficiently, according to Mark Lowe, director of the Iowa DOT’s Motor Vehicle Division.
"Dwolla’ brings the whole thing together by offering carriers an online payment option that is inexpensive and avoids credit card processing fees, which can be significant for large transactions," Lowe said. "I think this is the first of many opportunities that the Iowa DOT will explore using Dwolla.”In July 2013, nearly a dozen Iowa counties began accepting Dwolla for individual vehicle registration and property taxes.