WePay is an online payments platform for individuals, organizations, and businesses in the United States. WePay helps people sell tickets to events, send invoices, sell items online, and accept donations online. WePay also provides an API that allows developers to access its payments platform.[
WePay was founded by Rich Aberman and Bill Clerico in 2008 in Boston, Massachusetts, and is now based in Palo Alto, California. 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. After studying PayPal’s weaknesses, Aberman asked Clerico to help him to solve this problem and create WePay.
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.
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. 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. By December 2010, WePay had raised $9 million in funding. Other investors include Steve Chen, a cofounder of YouTube, and Eric Dunn, a former CTO of Intuit, as well as entrepreneur Dave McClure. In May 2011, founders Bill Clerico and Rich Aberman were named two of the Best Young Tech Entrepreneurs by Bloomberg Businessweek.
Shift in focus
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 individuals, organizations, freelancers, and businesses collect money online. The company now provides simple, lightweight tools to help people quickly and easily collect money online. WePay’s core audience includes individuals, organizations, and businesses that need to collect money but don’t have the time or energy to formally register with the secretary of state or create a merchant account. WePay’s service is also available to formal merchants.
WePay detects fraud using social data connections. According to Aberman, “[WePay uses] your online identity to verify your identity in the real world.”
WePay makes money by charging service fees only when money is collected. There are no up-front or recurring charges. WePay has a three-tier payment structure. Payments with bank accounts cost $0.50. Payments with a credit card are charged a 3.5% service fee of the total amount of money collected.
WePay enables clients to create FDIC insured “Accounts” to collect money online. The company creates lightweight, shareable Accounts insured by the Federal Deposit Insurance Corporation with functionality that permits payments into and out of those accounts.
The Account’s “Owner” has control over the Account financials and can grant access to other parties to view or modify the Account. Money can be withdrawn from the Account via an electronic transfer (to a bank account for example), a prepaid debit card, or a paper check. Payments are stored by the FDIC-insured Bancorp Bank, with which WePay has a business agreement.
As of September 2012, accepting payments is limited to US citizens.
In September 2011, the company employed 30 people. 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. 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%.
Partnership and competitors
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.
WePay’s main competitor is PayPal. 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. 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”.
Occupy Wall Street
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. 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”. By October 27, 2011, over 8,000 donors from 37 countries had donated $325,000 to the movement. The donations are funneled through 300 Occupy-affiliated accounts, which are linked on Occupy Wall Street’s website, Twitter, and Facebook accounts.