
WePay (YC S09) Launches WePay Clear, a Stripe Competitor with Fraud Protection - transburgh
http://techcrunch.com/2014/10/08/wepay-launches-wepay-clear-a-stripe-competitor-with-fraud-protection-built-in/
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gotothrowaway
My understanding is that stripe has always done some level of fraud protection
(e.g. Monitoring to ensure someone isn't incrementing through card numbers to
find one that works)

This seems like a necessary component of any "effective acquiring bank"[1]
because of where the liability falls. In the event of fraud, Stripe can get
hosed and they need to protect themselves.

I imagine they wouldn't have taken the step of lowering their payout delay
from 7 days to 2 days unless they were confident in their fraud detection
abilities.

Can you elaborate on what about WePays fraud protection is better? Am I dead
wrong?

Note: in no way affiliated with Stripe, just once considered starting
something in this industry.

[1] I'm defining Stripe and WePay as "effective acquiring banks." I guess you
can call them ISO's too. They're positioned somewhere in the web of words -
but bottom line is that their the ones that find merchants that need to
process cards.

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billclerico
Bill from WePay here - thanks for asking.

The value proposition of WePay Clear isn't entirely captured in TechCrunch's
choice of a headline, though they certainly have sensationalized it by drawing
a Stripe comparison.

Yes, WePay Clear takes on fraud responsibility & shields the platform. (as
does Stripe Connect)

However, WePay Clear does this in a whitelabel fashion, so that sellers on
platforms do not need to create a WePay account.

In other words, it's not just fraud protection or whitelabel - it's whitelabel
payments AND fraud protection.

Our launch partner in this is Freshbooks. Freshbooks currently offers several
payment gateways/merchant accounts as an option to sellers like Authorize.net
and Stripe. But their new primary "Freshbooks Payments" offering is built on
WePay Clear. You can check out the experience here:
[http://www.freshbooks.com/blog/2014/10/01/introducing-
paymen...](http://www.freshbooks.com/blog/2014/10/01/introducing-payments-by-
freshbooks/)

~~~
gotothrowaway
Thanks Bill.

Is there anything about the fraud protection that's particularly noteworthy?

I thought Stripe Marketplaces addresses this use case, but perhaps the
liability still falls on me (the developer) with Marketplaces?

~~~
billclerico
Our VP of Risk, John Canfield, was a senior leader on eBay's Trust & Safety
team for almost a decade. He did a great talk on Veda, our risk engine, at
QCon - check it out here: [http://www.infoq.com/presentations/big-data-
payment-risk-man...](http://www.infoq.com/presentations/big-data-payment-risk-
management)

Re: Stripe Marketplaces, yes - that's my understanding based on my
conversations with our customers.

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volandovengo
I find this hugely compelling. Fraud protection is a huge time sync for most
e-commerce providers.

Bill - could you please explain some of the fine print? Are all chargebacks
covered? Do you provide the ability to select which countries to accept
payments from? Thanks so much!

~~~
billclerico
Thanks! We believe that the payments are a commodity, but that good risk
management is really valuable.

One important item to note - WePay Clear is built for platforms - services
that connect buyers and sellers like online marketplaces, crowdfunding sites &
SMB commerce tools. We shield them from fraud losses by underwriting the
merchants directly, and taking the losses ourselves when we're wrong.

It is not built for standalone e-commerce merchants to protect them from
fraud. We are exploring this for the future, however - you can imagine that a
seller using one of our platform partners need protecting too.

You can accept payments from anywhere, as long as it's a Visa, Mastercard,
American Express or Discover. Sellers must be based in the U.S. or Canada,
though expanding the scope of this is our #1 company priority.

~~~
volandovengo
Thanks for the details.

When you offer this fraud guarantee for e-commerce sites, I'll be your first
customer.

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jcampbell1
Fraud protection is an odd marketing angle.

The merchant bank is the one that gets hosed due to fraud, so anti fraud
technology helps Stripe, Paypal, WePay, etc. WePay is marketing that they are
very good at not screwing themselves.

There are clients that care about anti-fraud, such as ecommerce companies that
ship high value electronics, but WePay has no experience in this category.

The crowd funding space has fraud issues as it is a method for turning stolen
cards into cash, but reversing a pledge is a lot easier than un-shipping an
xbox.

~~~
scottefein12
As Bill makes clear-WePay Clear isn't about fraud protection-we've always been
managing risk. It's offering fraud protection, risk mitigation with a white
label payments platform-that's a first in payments.

WePay specializes in two-sided applications-where you have buyers and sellers
and you're moving money between them. There's a lot more to fraud than a bad
credit card. See my other post RE: fraud.

~~~
jcampbell1
I think I get it. I could build my own with Authorize.net, then I'd get
screwed by fraud. I can go with PayPal, and get fraud protection, but my
customers will be bombarded with stupid "Bill Me Later" bullshit, gateway
pages and duplicated emails. I should choose WePay because I get fraud
protection and white label.

Makes sense.

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dkarapetyan
What if someone does not have facebook, linkedin, twitter, pinterest, etc.
Some people like to keep a low profile on the social web.

~~~
billclerico
There's a number of data sources that we use - social data is just one
category. So it helps, especially when other data sources are sparse, but
isn't the end-all, be-all of identify verification.

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joshmn
Fraud expert here -

After about ten minutes I can say that it's better than Stripe's, but
marginally.

~~~
arbuge
Care to elaborate? Both on the exact nature of your expertise, as well as your
analysis.

~~~
joshmn
I wrote the book on financial card fraud (figuratively, but I may as well
have) - I also was "in the scene" at one point.

I'm in the middle of writing a detailed post on my findings and will comment
back when complete :)

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JimmyL
When a merchant signs up with WePay Clear, do they actually have full WePay
accounts they can log into (which would have a WePay-branded experience)?

~~~
billclerico
It's configurable either way. But most applications will probably choose to
own the whole experience and not offer a WePay-branded experience.

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jusben1369
I know they talk a lot about fraud here but I wonder if the brand issues are
just as important.

~~~
billclerico
Bill from WePay here. You're absolutely right. "Freshbooks Payments" is way
more compelling than "WePay account connected to Freshbooks". App developers
historically have had to choose the latter in order to avoid fraud risk -
something we are changing with WePay Clear.

