7 ms·

WePay (YC S09) Launches WePay Clear, a Stripe Competitor with Fraud Protection

92 points by transburgh 12y ago

jusben1369 12y ago
I know they talk a lot about fraud here but I wonder if the brand issues are just as important.
- scottefein12 12y ago
  WePay Connect has all the same fraud features as Clear, but for a lot of brands they want to be the consistent voice across their platform-and rightfully so. WePay Clear allows you to process payments without giving up any of your brand's experience.
- billclerico 12y ago
  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.
gotothrowaway 12y ago
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.
- scottefein12 12y ago
  First remember that WePay is for platform companies-ones that want to allow their users to take funds, not single merchant apps. So crowdfunding sites, marketplaces, and business tools like Freshbooks, ConstantContact, and InvoiceASAP. In a two-sided platform, there's a lot more chance of fraud because you have to worry about both the buyer and the seller. Example: Crowdfunding Campaign. I start a campaign, charge a bunch of stolen cards, pull the money out, and disappear. WePay uses a wide variety of machine learning, anomaly detection, social risk (through our proprietary Veda Risk Engine), and transaction analysis to stop fraudulent transactions from occurring on our partner platforms.
- pc 12y ago
  > 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) Yeah, for sure. We (Stripe) power many commerce platforms today[1], so we've been able to accumulate a decent amount of training data. It's probably also worth pointing out that our functionality for platforms like these protects the platform from risk losses, and has from the start. But, more competition is good for users, and congrats to WePay on the launch. [1] Twitter, Facebook, Wave Accounting, Shopify, BigCommerce, Freshbooks, GoDaddy, Wufoo, and more.
  - deleted 12y ago
    [deleted]
- billclerico 12y ago
  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-payments-by-freshbooks/ http://www.freshbooks.com/blog/2014/10/01/introducing-paymen...
jcampbell1 12y ago
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 12y ago
  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 12y ago
    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.
volandovengo 12y ago
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 12y ago
  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 12y ago
    Thanks for the details. When you offer this fraud guarantee for e-commerce sites, I'll be your first customer.
JimmyL 12y ago
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 12y ago
  It's configurable either way. But most applications will probably choose to own the whole experience and not offer a WePay-branded experience.
joshmn 12y ago
Fraud expert here - After about ten minutes I can say that it's better than Stripe's, but marginally.
- deleted 12y ago
  [deleted]
- arbuge 12y ago
  Care to elaborate? Both on the exact nature of your expertise, as well as your analysis.
  - joshmn 12y ago
    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 :)
dkarapetyan 12y ago
What if someone does not have facebook, linkedin, twitter, pinterest, etc. Some people like to keep a low profile on the social web.
- billclerico 12y ago
  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.

92 points by transburgh 12y ago

jusben1369 12y ago

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

scottefein12 12y ago
WePay Connect has all the same fraud features as Clear, but for a lot of brands they want to be the consistent voice across their platform-and rightfully so. WePay Clear allows you to process payments without giving up any of your brand's experience.
billclerico 12y ago
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.

gotothrowaway 12y ago

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.

scottefein12 12y ago
First remember that WePay is for platform companies-ones that want to allow their users to take funds, not single merchant apps. So crowdfunding sites, marketplaces, and business tools like Freshbooks, ConstantContact, and InvoiceASAP. In a two-sided platform, there's a lot more chance of fraud because you have to worry about both the buyer and the seller. Example: Crowdfunding Campaign. I start a campaign, charge a bunch of stolen cards, pull the money out, and disappear. WePay uses a wide variety of machine learning, anomaly detection, social risk (through our proprietary Veda Risk Engine), and transaction analysis to stop fraudulent transactions from occurring on our partner platforms.
pc 12y ago
> 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) Yeah, for sure. We (Stripe) power many commerce platforms today[1], so we've been able to accumulate a decent amount of training data. It's probably also worth pointing out that our functionality for platforms like these protects the platform from risk losses, and has from the start. But, more competition is good for users, and congrats to WePay on the launch. [1] Twitter, Facebook, Wave Accounting, Shopify, BigCommerce, Freshbooks, GoDaddy, Wufoo, and more.
- deleted 12y ago
  [deleted]
billclerico 12y ago
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-payments-by-freshbooks/ http://www.freshbooks.com/blog/2014/10/01/introducing-paymen...

jcampbell1 12y ago

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 12y ago
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 12y ago
  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.

volandovengo 12y ago

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 12y ago
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 12y ago
  Thanks for the details. When you offer this fraud guarantee for e-commerce sites, I'll be your first customer.

JimmyL 12y ago

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 12y ago
It's configurable either way. But most applications will probably choose to own the whole experience and not offer a WePay-branded experience.

joshmn 12y ago

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

deleted 12y ago
[deleted]
arbuge 12y ago
Care to elaborate? Both on the exact nature of your expertise, as well as your analysis.
- joshmn 12y ago
  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 :)

dkarapetyan 12y ago

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

billclerico 12y ago
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.