The startup payment network Dwolla has a credit feature in beta testing.

The consumer- and merchant-facing Dwolla Credit, announced today, is a cardless private label credit product for the company's payment network, provided by Alliance Data's Retail Services business.

Consumers who pass the Dwolla Credit approval process can use the service immediately and for future purchases at participating businesses in Dwolla's new storefront directory. The company said it has 40 merchants signed up so far.

As with Dwolla's original cash-based service, transaction fees are 25 cents for transactions over $10, and free otherwise. Financing fees will apply.

Dwolla uses the Internet to create its cardless network of mobile phones, computers and physical locations to bypass traditional card and check systems.

"Credit is not new — but providing it on a real-time network that removes interchange fees, supports the evolution of credit and provides a means of cardless payment — is, and that's what Dwolla Credit does," Dwolla CEO Ben Milne said in a news release. "Alliance Data's deep experience and the true interest they have in our company will not only lend a new level of convenience to our community of users, but will also give them front-row seats to what we believe will be some really great innovations to credit."

"We're thrilled to partner with Dwolla, a nimble and forward-thinking company, to offer a convenient credit solution through the Dwolla network for today's mobile, time-starved consumer," added Melisa Miller, president of Alliance Data Retail Services. "The relationship between Dwolla and Alliance Data further expands our reach into the evolving payments industry, to leverage our customer marketing and analytics, as well as our digital expertise. This reinforces our pursuit to bring innovative payment solutions to businesses and consumers — wherever and whenever they need them."

Dwolla is currently inviting a small number of beta testers to try the system and will roll it out in the first quarter of 2014.

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