WePay Launches WePay Stores, Taking On PayPal - Tomio Geron - Social Markets - Forbes

WePay is expanding from a group payment service, taking on others in the online payments space such as PayPal.

The start-up is launching WePay Stores, a service for merchants to quickly set up online stores. For people who want to sell online they do not need a merchant account.

Palo Alto, Calif.-based WePay originally launched with a tool for people manage and collect payments from a group of people. Up until now WePay has focused on consumers: smaller groups such as fraternities, alumni groups, or friends who go on a group vacation.

WePay then released an events product, so that people organizing an event could manage both the ticket sales and the payment processing on WePay. This makes it easier than having to use, for example, both Eventbrite and PayPal for payments, says WePay co-founder Rich Aberman. Or for groups seeking donations, instead of using Kickstarter and PayPal, they can use just WePay. The WePay events product was built on a whim as demand for it grew–it’s designed to be quick to set up and doesn’t include sophisticated features such as ticket scanning that Eventbrite has.

Now WePay is going more directly after merchants, and eBay’s PayPal. Whereas people would previously have to use PayPal for payments and Yahoo Stores, Chase or Shopify to set up an online store, WePay is providing both payments and stores together, Aberman says. While other shopping cart services require more sophistication and some customization, WePay is aimed at people who don’t even necessarily have their own website. It’s designed to be set up in a minute, he says. People can embed the WePay store on their blog with a single line of code, Aberman says.

While WePay did not originally announce their intention to go after PayPal, Aberman is clear about that now. “Our goal is, we’re taking on PayPal,” Aberman says. “Our goal is to replace them as the de facto way to pay online.”

WePay charges 3.5%, while PayPal charges about 1.9% to 2.9% plus $0.30 per transaction. However, Aberman says because WePay is an all-in-one service, it ends up costing about the same as using PayPal plus another services such as Eventbrite. Other web site creators such as Weebly also offer stores.

Payments is a complex business which took PayPal years to develop so the company faces challenges. Payments include merchant accounts, underwriting, gateway fees, anti-fraud controls and chargebacks. Aberman says WePay handles all of that so customers don’t have to worry about it. WePay also has debit cards and bank accounts through a bank partner.

To help with this, one of WePay’s angel investors and an advisor is Max Levchin who built much of PayPal’s original anti-fraud system. WePay is also using technology that was not available when PayPal was founded, such as using social networking data to verify peoples’ identities.

In one example of a company using the WePay Stores service, StartupTees.com is using the service.

WePay was founded by Bill Clerico and Aberman in 2008 and is backed by August Capital, Highland Capital Partners and YCombinator.

 

via blogs.forbes.com