WePay Adds White-Label Risk Tools For Online Marketplaces

WePay is adding white-label risk management and other merchant services in an effort to reach digital marketplaces that are under pressure to improve user experience.

Called WePay Clear, the service allows clients to facilitate payments while WePay manages fraud, risk and compliance in the background in a manner that's invisible to the user.

"Becoming a payments company is a lot of work," said Bill Clerico, CEO of WePay, adding that work can include managing accounts, bank relationships, processing and connections to other business services. "We're now managing all of that."

WePay charges 2.9% plus $0.20 for each transaction. WePay Clear became widely available on Oct. 8 and its initial users include FreshBooks, a digital bookkeeping service.

WePay Clear provides platforms, such as crowd funding sites, online marketplaces and business software, with technology to enable the platforms' users—typically small merchants that sell goods and services—to accept payments. The functions include merchant onboarding, card processing and payouts, as well as risk.

"Platform businesses are moving toward becoming payment companies in different ways," Clerico said. "There's a need for them to do so quickly without doing all of the heavy lifting."

Most online platforms have a good user experience, but are challenged when managing payments, Clerico said. WePay Clear uses Veda, WePay's socially-driven risk engine, and WePay assumes all fraud and compliance risk—enabling the online marketplaces to offer a single experience to their users for payments and risk.

The service can replace the mix of companies these platforms or marketplaces would use to manage payments and risk, Clerico said. "There could be a collection of up to 20 different gateways. It can be a disjointed user experience," he said, adding the option of building an internal risk management system and payment gateway is typically too expensive for online marketplaces.

Over the past couple of years, WePay has evolved from a group payments company into a company that primarily offers an application programming interface (API), or tools for other companies to offer payments. More recently, it has added technology and staff to expand these tools and offer services beyond payments, a move a lot of digital payment companies are making as transactions become commoditized. It added payments industry veteran Steven Pellizzer to enhance the company's risk expertise, and added an API to Veda. Veda's API allows users to stitch together data sources such as behavior patterns, custom data from platforms, data from WePay's own transactional graph and social data from Facebook, LinkedIn, Twitter and Yelp to produce a risk score for each customer.

These expanded capabilities have also enabled WePay to offer a broader set of services to online marketplaces, giving WePay a consolidation pitch for sales calls. Other companies active in the  payments API space include Dwolla and Stripe.

"Before we were still offloading a lot of that operational overhead," Clerico said. "Now we're doing that stuff, but it is totally under the [client'] user experience."