
WePay (YC S09): Innovating Where Banks Won’t - waderoush
http://www.xconomy.com/san-francisco/2010/07/08/innovating-where-banks-wont-talking-with-rich-aberman-about-wepays-vision-for-group-payments/
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fjabre
It's about time they started innovating in this sector.

The banking industry as of late seems like nothing but fraud and arcane
outmoded banking policies (i.e. Why the hell do banks still close on
Sundays???)

I hope WePay branches out into other services. It'd be a miracle if I could
manage my bank account like I manage my other web 2.0 services.. It'd also be
nice if the bank I was with gave a shit about having me as a customer.

Banking hasn't fundamentally changed for over a century and as the article
points out, Paypal has been pretty lackluster in terms of innovation as well..

Banking is _screaming_ for innovation and I can't wait to hear about more
startups innovating in this space..

~~~
kscaldef
> Why the hell do banks still close on Sundays???

I'm confused. Does your ATM stop working on Sundays? Does your home banking
stop working on Sundays?

The closest branch of my bank is 3000 miles away. The last time I stepped
inside a branch was probably 4 or 5 years ago. I call them on the phone a
couple times a year. The fact that they aren't "open" on Sundays is a complete
non-issue for me.

~~~
tomjen3
My online banking really does close between 2 and 6. No joke.

But I don't want a web 2.0 bank, I want a bank as boring as you can get it,
one that only hires people with absolutely no life, with a plain boring
website.

In want that because they are not a new and exciting thing, they are a place
that should only ever do one thing: take my money, lend it extremly reliable
people and give me an interest in the return.

~~~
kscaldef
To be clear, I don't have a "web 2.0" bank. The only thing non-traditional
about my "bank" is that they are actually a credit union. However, they are
able to do pretty much everything I need either online, over the phone, or via
mail.

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powrtoch
So... how awesome is it that the founders of this money-handling system are
"Rich" and "Bill"?

~~~
sachinag
If you've ever met them, the actual awesomeness is just how bad-ass Rich and
Bill are.

~~~
kiba
Pretty please describe an anecdote showing how bad-ass and awesome Rich and
Bill are.

Thanks, in advance.

~~~
pg
To make it hard to quit they got a dog together. It's supposed to be the
company's dog, not either of theirs individually. The idea being that now the
company can't go away or there's no one to take care of the dog. Increased the
burn rate a little but turned out to be a net win.

~~~
apu
I know it's not really the same situation, but this reminds me of couples who
have a child to help protect/save their marriage. This usually hurts, rather
than helps the marriage.

~~~
ekanes
True, but it's not as bad as that. In the end, if you had to, you can give
away the dog to a good home with a _lot_ less paperwork. ;)

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illumin8
Great article. I particularly liked the discussion about how they took their
business through the YC process and to market.

It seems like WePay is a service that has a lot of potential. It also seems
like it might have some potential for fraud and money laundering, so I hope
that doesn't happen to the service.

~~~
narrator
I read a bit of the history of PayPal. It seems like they spent an enormous
amount of time dealing with fraud and security issues.

~~~
edash
Max Levchin is a WePay investor, though.

Fraud and security will be a headache, but they have access to smart people
who have handled these issues before.

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johnrob
_Our first 30 beta testers were all Y Combinator founders_

This seems like a powerful feature of YC!

~~~
pg
We deliberately encourage it. We learned about this technique from Google, who
use their own employees to beta test everything.

In fact, this is part of the reason we've grown so fast. As we continue with
YC it becomes increasingly clear how valuable the alumni network is (not just
in this way of course but in others too), so the bigger we can grow it the
better.

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yanilkr
A great Idea, but there is no secret sauce here. I wonder how difficult it
might be for someone like Facebook or Google to rip this.

~~~
jimbokun
Is there a WePay Facebook app yet?

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nickpinkston
At SxSW this year, there was a session on "Banking 2.0", and they (Mint,
LendingClub, etc.) all agreed that their philosophy is to treat banks as dumb
institutions - mainly to avoid regulatory pit-falls, etc.

WePay is following the same path, however the risk management side isn't
seeing much startup activity at all. This means consumers win in experience,
but systemic risk is largely the same.

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edash
On a single-page: [http://www.xconomy.com/san-
francisco/2010/07/08/innovating-w...](http://www.xconomy.com/san-
francisco/2010/07/08/innovating-where-banks-wont-talking-with-rich-aberman-
about-wepays-vision-for-group-payments/?single_page=true)

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raheemm
It does not seem like WePay will compete against Paypal. Why aren't there more
paypal competitors? What are the barriers to entry?

~~~
sstrudeau
I think the fact that only big players (Amazon, Google) have had any success
at all in this area is illustrative. Regulatory barriers plus ability to deal
with fraud at scale sets a very high hurdle. Not the kind of thing you can
easily bootstrap.

~~~
zandorg
Max Levchin said on Nerd TV that tackling fraud cost Paypal $100,000,000.

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mattmichielsen
I wonder how legal it is to accept donations for beer brewing supplies from my
friends "in exchange" for the beers I provide for them. The donation jar on
top of the kegerator works, but a lot of people don't carry cash these days. I
guess I'll find out.

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InclinedPlane
Won't or can't? How much of the lack of innovation in banking due to
regulation?

~~~
Baldy
I don't know about regulations, but I've heard some horror stories from a
friend of mine who works for a major bank. Most of the efforts his department
has made -- toward rethinking and redesigning online banking -- have been
thwarted by office politics.

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mkramlich
I want a bank with a CLI.

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wugunz
Wow, I feel like a total asshat. I did this years ago and called it GroupBuy.

The idea came to me when I was gathering money for a batch of shrooms my
friends and I were buying.

Its good for buying large quantities of drugs with friends.

Idea #2 for me that I slept on.

Fuck me.

~~~
jrockway
I agree with you, the tone of the article made it sound like the founders (and
the VCs that funded them) cured cancer, solved world hunger, and eradicated
all disease and unhappiness.

When in reality, they just found a way to take a cut of transactions. Just
like every other financial institution. Innovation indeed.

