WePay
Encyclopedia
WePay is an online payment platform for individuals, groups, and organizations in the United States. The platform allows people to sell tickets, send invoices, sell items, and accept donations online. Founded in 2008 in Boston, WePay is based in Palo Alto, California
.
The company profits through commissions, where it receives either 50 cents for bank account transactions or 3.5% of the total credit card transaction.
. The inspiration for WePay originated when Aberman found he had difficulty fundraising for his brother's bachelor party
. He had to amass $4,200 from 14 men spread across the United States to pay bottle service
at a club, rent for a beach house in Florida, and food such as burgers and chips. Little by little, he was able to collect the needed money after a few weeks of nagging. Aberman believed that there was a more efficient way of accomplishing this. After he studied PayPal
's weaknesses, he invited Clerico to join him in the establishing WePay. To devote his energy to WePay, Clerico stopped working at an investment banking job and Aberman postponed a scholarship to law school at New York University
.
Because Aberman and Clerico did not get into the Techstars
Boston program, and because they were accepted by Y Combinator
in California, they relocated to California. On the West Coast, they have received monetary support from Max Levchin
, a cofounder of PayPal
, and Ron Conway
, an angel investor
. The company received $1.65 million from August Capital during initial fundraising efforts; by August 2010, it received an additional $7.5 million from Highland Capital Partners
and August Capital. By December 2010, WePay had raised $9 million in funding. Other investors include Steve Chen
, a cofounder of YouTube
, and Eric Dunn, a former CTO of Intuit, as well as entrepeneur Dave McClure. In May 2011, founders Bill Clerico and Rich Aberman were named two of the Best Young Tech Entrepreneurs by Bloomberg Businessweek.
In September 2011, the company employed 30 people. Co-founder Clerico stated in an interview with Forbes
contributor Elizabeth Woyke that millions of dollars are channeled through the company's services each week. The company's employees meet every Monday at 10 am at the rear of the office. The directors of every department inform fellow employees of what transpired the previous week. The newly employed are individually announced. In October 2011, the number of WePay employees increased by 20%.
In 2011, the company was used by many Occupy Wall Street
supporters to donate money to the movement, which resulted in a surge of transactions. Dominic Basulto of The Washington Post
called WePay the "de facto
official way" to give financial donations to the Occupy movement "while simultaneously bypassing the largest financial institutions". By October 27, 2011, over 8,000 donors from 37 countries had donated $325,000 to the movement. The donations are funneled through 300 Occupy-affiliated accounts, which are linked on Occupy Wall Street's website, Twitter
, and Facebook
accounts.
-insured Bancorp Bank, with which WePay has a business agreement. The company creates lightweight, shareable accounts insured by the Federal Deposit Insurance Corporation
with functionality that permits payments into and out of those accounts.
WePay earns a profit through commissions. Contingent on if users are using their credit cards or bank accounts, the company will receive "either a flat 50 cents or 3.5% of the total". WePay allows group leaders to see how much money fellow members are paying so that the late paying can be reminded through email.
, a website that allows users to create memorial websites. The partnership gives users of 1000Memories the opportunity to create free WePay accounts, where visitors can use a credit card
or bank card
to donate in the names of the deceased.
WePay's competitors include PayPal. According to CNNMoney.com
, PayPal could pose trouble for WePay. Were the "behemoth" PayPal, which has 85 million active users, to alter its current "system for multi-party transactions", WePay would be in danger. Dave McClure
, a former employee of PayPal and the founder of 500Startups which provides financial support to WePay, stated that he did not believe WePay was in trouble. McClure said that PayPal does not "mov[e] as fast as startups".
Palo Alto, California
Palo Alto is a California charter city located in the northwest corner of Santa Clara County, in the San Francisco Bay Area of California, United States. The city shares its borders with East Palo Alto, Mountain View, Los Altos, Los Altos Hills, Stanford, Portola Valley, and Menlo Park. It is...
.
The company profits through commissions, where it receives either 50 cents for bank account transactions or 3.5% of the total credit card transaction.
History
The company was founded by Rich Aberman and Bill Clerico in 2008 in Boston, Massachusetts, and is based in Palo Alto, CaliforniaPalo Alto, California
Palo Alto is a California charter city located in the northwest corner of Santa Clara County, in the San Francisco Bay Area of California, United States. The city shares its borders with East Palo Alto, Mountain View, Los Altos, Los Altos Hills, Stanford, Portola Valley, and Menlo Park. It is...
. The inspiration for WePay originated when Aberman found he had difficulty fundraising for his brother's bachelor party
Bachelor party
A bachelor party , also known as a stag party, stag night or stag do , a bull's party , or a buck's party or buck's night , is a party held for a man shortly before he enters marriage, to celebrate his "last night of freedom" or merely to spend...
. He had to amass $4,200 from 14 men spread across the United States to pay bottle service
Bottle service
Bottle service is the sale of liquor by the bottle in bars and nightclubs.The purchase of bottle service typically includes a reserved table for the patron's party and mixers of the patron's choice. Bottle service can include the service of a VIP host, who will ensure that patrons have sufficient...
at a club, rent for a beach house in Florida, and food such as burgers and chips. Little by little, he was able to collect the needed money after a few weeks of nagging. Aberman believed that there was a more efficient way of accomplishing this. After he studied PayPal
PayPal
PayPal is an American-based global e-commerce business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to paying with traditional paper methods, such as checks and money orders....
's weaknesses, he invited Clerico to join him in the establishing WePay. To devote his energy to WePay, Clerico stopped working at an investment banking job and Aberman postponed a scholarship to law school at New York University
New York University
New York University is a private, nonsectarian research university based in New York City. NYU's main campus is situated in the Greenwich Village section of Manhattan...
.
Because Aberman and Clerico did not get into the Techstars
Techstars
TechStars is a mentorship-driven seed stage investment fund founded in 2006 by David Cohen, Brad Feld, Jared Polis and David Brown. TechStars provides seed funding for teams forming web/software companies. The organization holds programs in Boulder, Colorado, Boston, Massachusetts, Seattle,...
Boston program, and because they were accepted by Y Combinator
Y Combinator
Y Combinator is an American seed-stage startup funding firm, started in March 2005. Y Combinator provides seed money, advice, and connections at two 3-month programs per year...
in California, they relocated to California. On the West Coast, they have received monetary support from Max Levchin
Max Levchin
Max Rafael Levchin is a Ukrainian-born American computer scientist and internet entrepreneur widely known as one of the co-founders and for his role as the former chief technology officer of PayPal....
, a cofounder of PayPal
PayPal
PayPal is an American-based global e-commerce business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to paying with traditional paper methods, such as checks and money orders....
, and Ron Conway
Ron Conway
Ron Conway is an American angel investor, often described as one of the "super angels". Conway is recognized as a strong networker and is based in Silicon Valley.-Early career:...
, an angel investor
Angel investor
An angel investor or angel is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity...
. The company received $1.65 million from August Capital during initial fundraising efforts; by August 2010, it received an additional $7.5 million from Highland Capital Partners
Highland Capital Partners
Highland Capital Partners is a venture capital firm that focuses on investments in seed, early, and growth stage companies in the communications, consumer, digital media, healthcare, and information technology sectors. The firm's partners include: Peter Bell, Sean Dalton, Bob Davis, Richard de...
and August Capital. By December 2010, WePay had raised $9 million in funding. Other investors include Steve Chen
Steve Chen (YouTube)
Steven Shih "Steve" Chen is a Chinese Taiwanese American and a co-founder and previous Chief Technology Officer of the popular video sharing website YouTube.- Early years and education :...
, a cofounder of YouTube
YouTube
YouTube is a video-sharing website, created by three former PayPal employees in February 2005, on which users can upload, view and share videos....
, and Eric Dunn, a former CTO of Intuit, as well as entrepeneur Dave McClure. In May 2011, founders Bill Clerico and Rich Aberman were named two of the Best Young Tech Entrepreneurs by Bloomberg Businessweek.
In September 2011, the company employed 30 people. Co-founder Clerico stated in an interview with Forbes
Forbes
Forbes is an American publishing and media company. Its flagship publication, the Forbes magazine, is published biweekly. Its primary competitors in the national business magazine category are Fortune, which is also published biweekly, and Business Week...
contributor Elizabeth Woyke that millions of dollars are channeled through the company's services each week. The company's employees meet every Monday at 10 am at the rear of the office. The directors of every department inform fellow employees of what transpired the previous week. The newly employed are individually announced. In October 2011, the number of WePay employees increased by 20%.
In 2011, the company was used by many Occupy Wall Street
Occupy Wall Street
Occupy Wall Street is an ongoing series of demonstrations initiated by the Canadian activist group Adbusters which began September 17, 2011 in Zuccotti Park, located in New York City's Wall Street financial district...
supporters to donate money to the movement, which resulted in a surge of transactions. Dominic Basulto of The Washington Post
The Washington Post
The Washington Post is Washington, D.C.'s largest newspaper and its oldest still-existing paper, founded in 1877. Located in the capital of the United States, The Post has a particular emphasis on national politics. D.C., Maryland, and Virginia editions are printed for daily circulation...
called WePay the "de facto
De facto
De facto is a Latin expression that means "concerning fact." In law, it often means "in practice but not necessarily ordained by law" or "in practice or actuality, but not officially established." It is commonly used in contrast to de jure when referring to matters of law, governance, or...
official way" to give financial donations to the Occupy movement "while simultaneously bypassing the largest financial institutions". By October 27, 2011, over 8,000 donors from 37 countries had donated $325,000 to the movement. The donations are funneled through 300 Occupy-affiliated accounts, which are linked on Occupy Wall Street's website, Twitter
Twitter
Twitter is an online social networking and microblogging service that enables its users to send and read text-based posts of up to 140 characters, informally known as "tweets".Twitter was created in March 2006 by Jack Dorsey and launched that July...
, and Facebook
Facebook
Facebook is a social networking service and website launched in February 2004, operated and privately owned by Facebook, Inc. , Facebook has more than 800 million active users. Users must register before using the site, after which they may create a personal profile, add other users as...
accounts.
Business model
WePay enables clients to create "group accounts" to collect money for various projects. The group's "administrator" specifies how much members should donate and the deadline for paying. The administrator can withdraw the funds through three options: "an electronic transfer", "a prepaid debit card", or "a paper check". Payments are stored by the FDICFederal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
-insured Bancorp Bank, with which WePay has a business agreement. The company creates lightweight, shareable accounts insured by the Federal Deposit Insurance Corporation
Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
with functionality that permits payments into and out of those accounts.
WePay earns a profit through commissions. Contingent on if users are using their credit cards or bank accounts, the company will receive "either a flat 50 cents or 3.5% of the total". WePay allows group leaders to see how much money fellow members are paying so that the late paying can be reminded through email.
Partnership and competitors
In August 2010, WePay partnered with 1000Memories1000Memories
1000Memories is a website that lets people organize, share and discover old photos and memories and to set up family trees.-History:The company is based out of San Francisco, California, and was founded in 2010 after co-founders Brett Huneycutt and Jonathan Good left McKinsey, and co-founder Rudy...
, a website that allows users to create memorial websites. The partnership gives users of 1000Memories the opportunity to create free WePay accounts, where visitors can use a credit card
Credit card
A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services...
or bank card
Bank card
A bank card is a plastic card issued by a bank to its clients that may perform one or more of the following services:* ATM card, card used for transactions at automatic teller machines* Debit card, card linked to a bank account and used for making purchases...
to donate in the names of the deceased.
WePay's competitors include PayPal. According to CNNMoney.com
CNNMoney.com
CNNMoney.com is the world's largest business website. The site is the online home of Fortune and Money, and serves as CNN.com's exclusive business site. The site, edited by Chris Peacock, together with the three titles, is part of the Fortune|Money Group, and attracts more than 10.8 million unique...
, PayPal could pose trouble for WePay. Were the "behemoth" PayPal, which has 85 million active users, to alter its current "system for multi-party transactions", WePay would be in danger. Dave McClure
Dave McClure
Dave McClure is an entrepreneur and prominent angel investor based in the San Francisco Bay Area, who founded and runs the business incubator "500 Startups". He is often described as one of the super angel investors.-Bio:...
, a former employee of PayPal and the founder of 500Startups which provides financial support to WePay, stated that he did not believe WePay was in trouble. McClure said that PayPal does not "mov[e] as fast as startups".