Many smart phone users have become accustomed to pulling up locator maps on those devices to find nearby stores. Now, using an application developed by Des Moines-based Dwolla Corp. called Dwolla Spots, they can also use their phones when it’s time to pay.

“It’s a cool system,” said Joe Johnson, manager at Dos Rios Cantina and Tequila Lounge on Court Avenue, which last week began accepting Dwolla Spots. The smart phone application, launched earlier this month, allows Dwolla users to pay for products or services by clicking on a locator pin, or spot, from a map of retailers displayed on the phone, which automatically recognizes their location.

‘Always in your hand’

“Consumers simply want to engage in a very easy financial transaction,” said Ben Milne, founder and president of Dwolla. “And what’s easier than being able to do that with something that’s always in your hand?”

The new location-based payment platform has already grabbed the attention of some “very large” retail chains, Milne said.

“We’re working with them about what it would be like to roll out Dwolla Spots at all of their locations,” he said. “Let’s just say in theory we could get someone like a Starbucks. With our processes, Starbucks could be up and running using Dwolla within a matter of minutes.”

In addition to making payments easier for tech-savvy customers, Dwolla has the potential to save retailers money on most transactions. With Dwolla Spots, merchants pay the same flat fee of 25 cents per transaction that the company built into the online payment system it launched a year ago. With Dwolla, retailers can avoid the 1 to 3 percent “swipe” fees charged by card processing companies such as Visa Inc.

Working with Shane Neuerburg, a software development partner, Milne developed the proprietary system. It uses the Automated Clearing House, a vast secure electronic infrastructure used by U.S. financial institutions to send and receive money.

In its first year of existence, Dwolla has gained online payment users in all 50 states and last month surpassed $1 million in fund transfers, said Jordan Lampe, the company’s marketing director. The number of people using Dwolla for online payments, including payments to online retailers as well as person-to-person payments, has been increasing by an average of 270 percent each month, he said.

No scanner needed

The technology for retailers to accept payments through smart phones is just beginning to emerge. For instance, Starbucks Corp. in January introduced a mobile pay-by-phone application through which customers make purchases by holding their smart phone up to a scanner at the register.

Also in January, Apple Inc. announced plans to release a product this year that will enable iPhone and iPad users to make purchases with their devices, using Near-Field Communication (NFC) technology. With NFC, users pass their device over a scanner to make a payment.

Visa also has been working on location-based systems, “but they haven’t figured out how to quickly and efficiently integrate your location with the merchant,” Milne said. “Nobody has put the dots together. And everyone is so hung up on this behavior of NFC that they just ignore the fact that it could be done without these options.”

Milne said he believes Dwolla got ahead of the curve by eliminating the need for an intermediary scanner.

“Why don’t we just skip over all this junk that’s going to cost everybody a lot of money and just go to pressing a button to pay for what I want? And that’s exactly what we’ve done.”

Dwolla claims that more than 700 merchants nationwide accept online Dwolla payments, with more than half of those merchants located in Greater Des Moines. Each participating merchant is eligible to receive in-person payments through Dwolla Spots, unless they choose to opt out.

They’re curious

Mars Café in the Drake neighborhood is among an initial group of retailers that have begun accepting payment using the Dwolla Spots app.

“The people using it seem to like it because it’s pretty convenient,” said Korrie Hoskins, Mars Café’s general manager, who said the restaurant has at least a couple of Dwolla Spots transactions every morning. “People have been really curious about it; they’re starting to hear more about it and are curious about how they can use it.”

Raygun LLC, a specialty T-shirt shop in the East Village, has provided Dwolla as an online payment option on its website for the past year, and recently began accepting Dwolla Spots payments at its store.

“It seems like people under 32 get it,” said Raygun’s owner, Mike Draper, who is 28. “But I think that age will keep going up.” Previously, some customers would have the cashier look up their Dwolla accounts to pay at the store, he said.

“It’s all seamless now,” he said. “So now it’s faster than a credit card. When you can compete on a level like that, you kind of wait for society to catch up.”