WePay

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WePay, Inc.
Private
Industry Technology
Founded 2008 in Boston, Massachusetts
Headquarters Redwood City, California[1]
Key people
Bill Clerico (CEO)[2]
Richard Aberman (COO)[2]
Number of employees
100-200[3]
Website www.wepay.com

WePay is an online payment service provider in the United States. WePay's payment API focuses exclusively on platform businesses such as crowdfunding sites, marketplaces and small business software. Through this API, WePay gives these platforms a way to offer credit card acceptance to their users while protecting themselves from losses due to fraud with included risk management technology.[4]

In 2015, WePay was #62 on the Inc. 500 list of the fastest growing companies in America, with three year revenue growth of 4,354 percent.[5]

Creation[edit]

WePay was founded by Rich Aberman and Bill Clerico in 2008 in Boston, Massachusetts, and is now based in Redwood City, California.[6][7] The original inspiration for WePay occurred to Aberman when he had difficulty raising money for his brother's bachelor party. Aberman had to collect $4,200 from 14 friends spread across the United States to pay for bottle service at a club, rent at a Florida beach house, and food such as burgers and chips. Through a series of cash, checks, and PayPal money transfers, Aberman was eventually able to collect the money he needed. Aberman found the process very burdensome as he had to nag his friends to pay him back. Aberman believed that there should be an easier way to collect money from many people.[8] After studying PayPal's weaknesses, Aberman asked Clerico to help him to solve this problem and create WePay.[9]

To devote his energy to WePay, Clerico stopped working at an investment banking job and Aberman postponed a scholarship to law school at New York University.[8]

Funding[edit]

Aberman and Clerico were unable to get funding in Boston from the Techstars program. Instead, they were accepted by Y Combinator in California, which prompted Aberman and Clerico to move the company to California. On the West Coast, they received monetary support from Max Levchin, a cofounder of PayPal, and Ron Conway, an angel investor.[6] The company received $1.65 million from August Capital during initial fundraising efforts; by August 2010, it received an additional $7.5 million from Highland Capital Partners and August Capital.[10] By December 2010, WePay had raised $9 million in funding.[6] Other investors include Orlando Ramos, founder of Cyberpowerdepot, Steve Chen, a cofounder of YouTube, and Eric Dunn, a former CTO of Intuit,[8] as well as entrepreneur Dave McClure.[11] In May 2011, founders Bill Clerico and Rich Aberman were named two of the Best Young Tech Entrepreneurs by Bloomberg Businessweek.[12]

WePay raised another $15 million in 2014, coinciding with a shift in its business model that saw it discontinuing its direct merchant and donation businesses to focus solely on its payments API for platforms.[13]

In 2015, WePay raised a $40 million round from FTV Capital and the Japanese e-commerce company Rakuten. According to CEO Bill Clerico, the purpose of this round was to accelerate WePay’s efforts to expand its efforts to support payments in more countries internationally.[14]

Shift in focus[edit]

Aberman and Clerico found trouble seeking traction in the peer-to-peer group payments space so they decided to shift the focus of the company to help small businesses accept credit cards online. WePay then realized that the highest growth part of their business and the one where they had a unique value proposition was through its API, which they had opened up in 2011.[15] In 2014, WePay discontinued its donation service to focus on its other products.[16]

Innovation[edit]

WePay detects fraud using social data connections and machine learning algorithms.[17] According to Aberman, "[WePay uses] your online identity to verify your identity in the real world."[18] Using this proprietary Veda social risk engine technology, WePay has been able to uniquely understand platform businesses' users and can offer these platforms both a flexible user experience while still protecting them from the burdens of fraud and compliance.

Business model[edit]

WePay makes money by charging service fees only when money is collected. Payments with a credit card are charged a 2.9% + $0.30 service fee of the total amount of money collected.

Operations[edit]

In September 2011, the company employed 30 people.[19] Co-founder Clerico stated in an interview with Forbes contributor Elizabeth Woyke that millions of dollars are channeled through the company's services each week.[19] The company's employees meet every Monday at 10 am at the rear of the office. The directors of every department inform fellow employees of what transpired the previous week. The newly employed are individually announced. In October 2011, the number of WePay employees increased by 20%.[2]

After its Series D round in 2015, WePay said that it had over 100 employees, and had plans to grow to 200 in the next 18 months.[20]

Partnerships[edit]

In August 2010, WePay partnered with 1000Memories, a website that allows users to create memorial websites. The partnership gives users of 1000Memories the opportunity to create free WePay accounts, where visitors can use a credit card or bank card to donate in the names of the deceased.[21] In February 2014, WePay partnered with Aplos Software, a web-based nonprofit software company, to help nonprofits and faith-based organizations accept online donations. Users could create a free WePay account, then track their donations and create receipts using Aplos Donor Management.[22]

Customers[edit]

Competition[edit]

WePay's main competitor during its early stages was PayPal.[10] According to CNNMoney.com, PayPal could pose trouble for WePay. Were the "behemoth" PayPal, which has 85 million active users, to alter its current "system for multi-party transactions", WePay would be in danger.[8] Dave McClure, a former employee of PayPal and the founder of 500Startups which provides financial support to WePay, stated that he did not believe WePay was in trouble. McClure said that PayPal does not "mov[e] as fast as startups".[8]

After discontinuing its direct merchant business and focusing on its API, WePay competes more directly with other API companies such as Stripe and PayPal’s Braintree subsidiary. [34]

Occupy Wall Street[edit]

In 2011, the company was used by many Occupy Wall Street supporters to donate money to the movement, which resulted in a surge of transactions.[2] Dominic Basulto of The Washington Post called WePay the "de facto official way" to give financial donations to the Occupy movement "while simultaneously bypassing the largest financial institutions".[35] By October 27, 2011, over 8,000 donors from 37 countries had donated $325,000 to the movement.[36] The donations are funneled through 300 Occupy-affiliated accounts, which are linked on Occupy Wall Street's website, Twitter, and Facebook accounts.[37]

References[edit]

  1. ^ Xavier, Jon. "Hello Redwood City!". WePay Blog. WePay. Retrieved 6 August 2015. 
  2. ^ a b c d Terdiman, Daniel (2011-11-14). "At WePay, planning a 'balls to the wall' 2012". CNET. Archived from the original on 2011-11-22. Retrieved 2011-11-22. 
  3. ^ Penn, David. "WePay Closes $40 Million Series D Round Led by FTV Capital". Finovate Blog. Finovate. Retrieved 6 August 2015. 
  4. ^ Green, Tim (2012-02-14). "WePay is Growing 30 per cent a month". Mobile Entertainment Biz. Archived from the original on 14 May 2012. Retrieved 2012-02-26. 
  5. ^ "WePay Inc. 5000 profile page". http://www.inc.com/. Inc. Magazine. Retrieved 14 August 2015. 
  6. ^ a b c Kirsner, Scott (2010-12-20). "Born in Boston, growing in Calif.". Boston Globe. Archived from the original on 2011-01-09. Retrieved 2011-01-09. 
  7. ^ Xavier, Jon. "Hello Redwood City!". WePay Blog. WePay. Retrieved 6 August 2015. 
  8. ^ a b c d e Alsever, Jennifer (2010-10-12). "WePay is the anti-PayPal". CNNMoney.com. Archived from the original on 2011-01-09. Retrieved 2011-01-09. 
  9. ^ "WePay set out to kill PayPal". OneIndia. 2010-10-16. Archived from the original on 2011-01-09. Retrieved 2011-01-09. 
  10. ^ a b Barbierri, Cody (2010-08-12). ""Group" paying service WePay gets $7.5M boost". VentureBeat (Reuters). Archived from the original on 2011-01-09. Retrieved 2011-01-09. 
  11. ^ "WePay's Group Payments Get Some Big-Name Backers, Including Max Levchin". TechCrunch. Archived from the original on 2011-11-23. Retrieved 2009-11-23. 
  12. ^ "Best Young Tech Entrepreneurs". Bloomberg Businessweek. 2011-05-17. Archived from the original on 2011-11-23. 
  13. ^ Rao, Leena. "After A Pivot, WePay Raises $15M To Focus On Payments API For Marketplaces, Crowdfunding Sites And Others". TechCrunch. TechCrunch. Retrieved 6 August 2015. 
  14. ^ Reader, Ruth. "WePay raises $40M to take its marketplace payment platform global". VentureBeat. VentureBeat. Retrieved 6 August 2015. 
  15. ^ "Why did WePay pivot". Quora. 2012-01-11. Archived from the original on 2012-02-26. 
  16. ^ https://www.wepay.com/donations/864753973
  17. ^ He, Jun. "Automating machine learning for platform fraud detection". WePay Blog. WePay. Retrieved 6 August 2015. 
  18. ^ "Can Your Social Network Protect You From Credit Card Fraud?". Inc Magazine. Archived from the original on 2012-02-26. 
  19. ^ a b Woyke, Elizabeth (2011-09-30). "For Effective Fundraising, Choose Facebook Over Twitter". Forbes. Archived from the original on 2011-11-22. Retrieved 2011-11-22. 
  20. ^ Penn, David. "WePay Closes $40 Million Series D Round Led by FTV Capital". Finovate Blog. Finovate. Retrieved 6 August 2015. 
  21. ^ Barbierri, Cody of VentureBeat (2010-08-10). "Raise Money in Memory of a Loved One With 1000Memories". The New York Times. Archived from the original on 2011-01-09. Retrieved 2011-01-09. 
  22. ^ Hood, Daniel (February 27, 2014). "Aplos Adds Online Donations". Accounting Today. Retrieved 11 June 2014. 
  23. ^ "Who is WePay?". GoFundMe. GoFundMe. Retrieved 6 August 2015. 
  24. ^ "Introducing: Payments by FreshBooks". FreshBooks. FreshBooks. 
  25. ^ "Introducing WePay!". Constant Contact. Constant Contact. 
  26. ^ "WePay Customer Page". WePay. WePay. Retrieved 6 August 2015. 
  27. ^ "Start Charging Member Dues". help.meetup.com. Meetup. Retrieved 6 August 2015. 
  28. ^ "WePay Customer Page". WePay. WePay. Retrieved 6 August 2015. 
  29. ^ "Who is WePay". help.infusionsoft.com. Infusionsoft. Retrieved 6 August 2015. 
  30. ^ "WePay Customer Page". WePay. WePay. Retrieved 6 August 2015. 
  31. ^ "WePay Customer Page". WePay. WePay. Retrieved 6 August 2015. 
  32. ^ "WePay Customer Page". WePay. WePay. Retrieved 6 August 2015. 
  33. ^ "WePay Customer Page". WePay. WePay. Retrieved 6 August 2015. 
  34. ^ Leena, Rao. "Payments company WePay raises $40 million to go global". Fortune. Fortune. Retrieved 6 August 2015. 
  35. ^ Basulto, Dominic (2011-11-02). "The real Wall Street occupation is online". The Washington Post. Archived from the original on 2011-11-22. Retrieved 2011-11-22. 
  36. ^ "Website: More than 8,000 donors for Occupy Wall St". The Wall Street Journal. 2011-11-01. Archived from the original on 2011-11-22. Retrieved 2011-11-22. 
  37. ^ Boyle, Christina (2011-10-29). "'1%' proving protesters right". New York Daily News. Archived from the original on 2011-11-22. Retrieved 2011-11-22. 

External links[edit]