
Payments startup WePay raises $15M, kills direct-to-consumer offering - billclerico
http://venturebeat.com/2014/01/16/wepay-15-million-series-c/
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gkop
The headline is linkbait. They didn't "pocket" anything, just raised $15M.

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jusben1369
To be fair when I read that headline I immediately knew it meant they raised
$15 million. I would use that term.

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dudus
maybe it's because I'm not a native english speaker and don't understand the
financial side very well, but I thought they had really pocketed the profits
and devalued the company in the way. The fact that they killed one of the
products kinda reinforced that notion.

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mikespear
This actually a very exciting development. As a B2B provider of fundraising
software for nonprofits, StayClassy (www.stayclassy.org), we do everything we
can to put our customers' brands first. This reduces donor confusion, and ends
up helping everyone involved be more successful.

Having WePay sunset their consumer-facing products has a similar effect in
that it allows us to transact more money through WePay while reducing
potential confusion around which services are responsible for which part of
the fundraising process.

The WePay team has always been extremely responsive to questions and feature
requests, so I'm excited to see what they do with the added resources and
renewed focus on partner services.

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steveklabnik
> we do everything we can to put our customers' brands first. This reduces
> donor confusion, and ends up helping everyone involved be more successful.

Yup, this is very important: it's one of the reasons why Balanced is 100%
white label. We've heard this sentiment echoed over and over again from our
customers. They want to own that relationship.

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kaa2102
I looked around for a simple pay solution to integrate into my site and chose
wepay about a year ago. It was one of the few services where I didn't have to
become a "pay API code ninja" to use. I got an email that they will also phase
out the easy-to-use buttons.

I want to focus on delivering value to my customers - I'm not trying to become
a pay button implementation expert. I'm not very happy about wepay making this
move. I think I am going to be switching to stripe.

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billclerico
Hi Keith - I'm sorry the shutdown is disruptive to your business.
Discontinuing our direct-to-merchant products was a tough call for us and
something we debated intensely.

At the end of the day, unlike Stripe which is building broader payment
functionality - we're trying to provide payments for a very focused usecase:
platforms (like marketplaces, crowdfunding sites, small business software,
etc)

Any product that isn't directly working towards that takes resources away from
our platform work. In addition, because it isn't our core focus, it won't be a
best-in-class product. That's why we made the tough call to do this.

If there's anything I can do to help make the transition to Stripe or anyone
else easier, please let me know - bill@wepay.com Thanks for being a customer.

~~~
sync
Stripe targets marketplaces too:
[https://stripe.com/connect](https://stripe.com/connect) \-- you have your
work cut out for you!

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billclerico
Agreed, we have a lot of respect for the guys & gals at Stripe. Patrick, John
& I were in the same YC batch and we know them well. I think we have different
visions - in my words (not theirs), Stripe is looking to build a general-
purpose payment API for developers. WePay is trying to build a payment company
to serve platforms only.

We believe we can service platforms better by focusing on that usecase. For
example, we built Veda, our risk engine the specializes in underwriting the
risk of individuals and small businesses using social media. Because of this,
we can pay out marketplace sellers faster, collect less data from them (making
signup easier), and not hold the marketplace accountable for fraud loss.

I think that platforms are such an interesting segment of ecommerce that they
deserve special attention.

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ams6110
I use WePay's invoices for a non-profit that I help run. While they weren't
perfect (what is?) they did the job and let me focus on other things. I'm now
on the lookout for a simple invoicing platform that supports single and multi-
payment invoices and some basic branding capabilities. I might even look at
building something on their API or Stripe (would lean towards Stripe as I've
used them before but IIRC their fees are a touch higher).

Sad to see these services go, but I can imagine that the support burden of a
consumer-facing service is something they'll be glad to be rid of if nothing
else.

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HorizonXP
I'm not quite sure what your needs are, but as a consultant, I've used Wave
([http://www.waveapps.com/](http://www.waveapps.com/)) for invoicing and basic
bookkeeping, and it's worked out pretty well.

~~~
ams6110
That actually looks pretty good. Thanks for the link.

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rhizome
Killing the P2P pay features? Let's do a little detective work..."Other
investors include Max Levchin, former chief technology officer of PayPal."

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billclerico
There's a much larger opportunity in serving other companies who are building
specific usecases and need payment functionality, versus trying to be the best
at everything yourself.

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rhizome
Then why does PayPal persist in offering P2P?

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billclerico
PayPal uses P2P as a way to get users to link their bank accounts. Then later,
when those users are checking out at a merchant, PayPal tries to
trick/strongly encourage those users to pay with that linked bank account,
instead of a credit card.

The economics are dramatically different - PayPal makes about 3% of the
transaction on a bank account funded payment, they make much less than 0.5% on
a credit card funded payment.

So P2P is a loss leader to drive funding mix.

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jordanmessina
Is there anything that WePay is offering that Balanced doesn't?

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billclerico
Bill from WePay here

The fundamental difference with WePay is that we take the risk of loss, so
marketplaces don't lose money to fraud. Balanced holds the marketplace liable
for chargebacks.

Since they aren't taking the risk, Balanced does offer a greater flexibility
around the user experience. We have produce improvements in the works to
accomplish our vision of complete flexibility & no risk of loss. We also don't
charge for payouts, which can make a significant pricing difference for
marketplaces.

~~~
firepoet
Can't wait to see the "complete flexibility" thing show up. Once I don't have
to ask my customers to make an extra click to accept payments I'll take a look
at your solution again. Until then, we'll stick with Balanced.

Best of luck!

~~~
billclerico
Thanks. It's tricky to both take the risk and not have a relationship with the
seller, hence why we insist on it right now. If we pushed the risk to the
marketplace, it would be trivial - but this isn't something we believe is
valuable in the long term.

>Once I don't have to ask my customers to make an extra click to accept
payments I'll take a look at your solution again.

You actually can setup users via an API call today (so they can start
accepting payments immediately) using our register call. They then have 14
days to confirm their email and set a password. On many sites this improves
conversion double digit percentages over alternatives like PayPal.

[https://www.wepay.com/developer/reference/user#register](https://www.wepay.com/developer/reference/user#register)

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QuantumGood
Used WePay for years. They never fixed several problems with their interface,
so now I have followed their link to EventSpot (Constant Contact), but
Constant Contact does't even support WePay as a provider. Always feels
bleeding edge using WePay.

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billclerico
Bill from WePay here. Sorry you had that experience. EventSpot hasn't gone
live with their integration yet, but they will before we shut down our Event
tool. We'll do everything we can to make the transition smooth - please let us
(or me) know if we can help. support@wepay.com bill@wepay.com

Edit: More info here [https://support.wepay.com/entries/31989493-Event-
management-...](https://support.wepay.com/entries/31989493-Event-management-
with-EventSpot)

~~~
QuantumGood
I worked with support on issues, but was told that nothing would be changing.
Basically seems that WePay was never committed to explaining things well, or a
user interface. This change was certainly explained poorly. EventSpot didn't
even know what was happening, though they eventually had someone in the know
get back to me.

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uses
That's a bummer. I thought WePay was trying to be something like a more modern
version of PayPal's "add to cart" and "donate" buttons, with additional API
features for more advanced setups.

So what's a good way to get an "add to cart" button that you can paste into
some html and have customers check out without registering for accounts or
seeing too much confusing 3rd party branding?

~~~
antidaily
[http://www.fleapay.com](http://www.fleapay.com) \- full disclaimer: I'm a
founder (and we're hiring).

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nhangen
I already replied to the team with similar sentiments, but I think this is a
great move.

Many of their D2C products competed with the businesses that were using their
APIs, so it makes sense to pick a channel and focus on just one side of the
equation.

I really like everything about WePay other than the fact that it's limited to
the US.

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billclerico
thanks! we'll fix that last part soon.

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mikespear
Can't wait!

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thatthatis
TIL: wepay had a direct to consumer offering.

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rhizome
It did. I considered it for freelance billing at one time. In fact, I signed
up, but for life getting in the way never finished setting it up. Guess I can
cross that one off my to-dos!

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stoneric
WePay simply has the best business / API combination out there right now. No
monthly fee, sure that is important, but getting your money deposited to your
account ASAP is the main value and no amount of tech, no matter how simple
does what WePay can accomplish.

Writing some OAuth code is pretty much standard fare amongst the API
providers....getting your cash? Now that's a different story.

There's no other API out there that is as transparent or seamless to a
business, without the new business disruption of having to wait 1 week (or
more) for the cash.

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TTPrograms
At least among my friends Venmo totally dominates the so-called "direct-to-
consumer" payment market. Maybe they just didn't anticipate hitting critical
mass in competition.

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billclerico
Bill from WePay here

Venmo is a great product (I use it too! And so does Lucas.)

We originally launched WePay thinking we could build a great P2P experience
and charge fees for it. We found that end-users preferred free options like
Venmo & PayPal versus paid versions, so we gradually drifted up market in
response.

We ended up serving platforms because they aggregate lots of individuals in a
context where they expect to pay for payment processing. It leverages our core
capability of processing payments for individuals, but it does so in a context
where our business model makes sense.

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hit8run
Is there something like "app-fees"
([https://www.wepay.com/developer/platform/app-
fees](https://www.wepay.com/developer/platform/app-fees)) for paypal? Normally
I would simply use wepay but it is not available for Germany, right?

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billclerico
not yet, sorry. but we're on our way as fast as possible

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llamataboot
Sad about this. Quite a lot of non-profits and activist organizations use
WePay for their campaigns and organizing. It was one of the backbones of local
Occupy fundraising in many cities.

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billclerico
The Occupy Movement were some of our earliest customers. Our hope is to
continue to serve them through our donation partners (like GoFundMe, Fundly,
GiveForward, etc) now.

WePay will still be the same backend, but you'll benefit from our partners'
software, which is far better for donations than ours is.

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vvvVVVvvv
>But its primary use will be international expansion

EMEA? APAC? I guess both, and it'd be nice in Europe.

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coreymgilmore
wouldn't be surprised to see someone buy these guys up pretty soon.

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harrisreynolds
Does WePay support ACH debits (payments from a bank account)?

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billclerico
Yes! Set the funding_sources parameter to "bank" or "bank,cc" depending on
whether you'd like to give the customer a choice of payment methods.

[https://www.wepay.com/developer/reference/checkout#create](https://www.wepay.com/developer/reference/checkout#create)

