Startup WePay launched as a group payments solution that allowed people to purchase an item together online, and has since pivoted to become a PayPal-like contender in the online payments space. The last time BetaKit covered the Palo Alto-based company was when it introduced new “pay now” payment buttons in August 2012 to help merchants add WePay to their online stores. Today the company is looking to mobile, and is launching a new iOS app to help small businesses process credit cards and create invoices on the go.
Launched in March 2010, the company pivoted away from group payments to focus on helping small service-based businesses manage their invoicing and payments. Before today, a marketing consultant using the platform could create invoices online, send them to clients who could then pay via credit cards, or have a WePay button on their website to let any client pay online. With the launch of the mobile app, users can create invoices on the go, and process credit cards in person using the app.
Unlike competitors like Square and PayPal Here that require merchants to plug hardware into a device’s headphone jack, WePay doesn’t require any hardware to process payments, rather users just enter the credit card number and expiry date, and the company authenticates the customer’s identity and approve the payments. WePay founder Bill Clerico said that aside from the fact that they don’t need hardware to accept credit cards on the go, the company’s biggest differentiator from competitors like Square is that they are focused on small service-based businesses who might process one or two payments per day (painters, maids, consultants, etc), whereas Square is targeted to retailers like coffee shops who might be processing hundreds of micro-transactions per day.
“There really is not a company that is focused on serving the needs of the small service provider that needs to do invoicing and kind of manage their customer relationships,” Clerico said. “We launched payments buttons to serve that use case, we launched this great invoicing tool, and today we’re announcing our mobile app which takes invoicing and what we call virtual terminal to the merchant’s pocket so that they can send invoices while they’re on the go, manage who has paid and who hasn’t paid, and also take credit card payments in person.”
Using the mobile app merchants can create and send an invoice to clients by entering their email address, how much they owe, and itemization of charges, which clients would then pay online (there’s no consumer-facing app as of yet). If a merchant happens to be meeting their client in person, they can type in the credit card number and expiration date into the mobile app to process the payment, rather than swiping the card like they would do with a solution like Square.
“If you’re charging hundreds of cards a day, you need to have the hardware, it’s the only way you can keep up with that velocity of charges,” Clerico said. “But for service providers they’re only charging a handful of cards in a given day, not having hardware is actually an advantage.”
The company charges the same as PayPal for credit card payments, 2.9 percent plus $0.30 per transaction, but only charges one percent plus $0.30 cents for transactions made from linked bank accounts. Square’s pricing is a flat 2.75 percent per transaction, which comes in a bit cheaper but doesn’t include the ability to accept online payments or send invoices (though they do have the Square Register point-of-sale app).
When it comes to the competition, PayPal tackles both online and mobile payments, and while Clerico said the merchants they work with have had bad experiences using it in the past, there’s no disputing the fact that they have a strong brand and are recognized by clients and merchants alike. WePay’s focus on service-based businesses sets it apart from the mobile payments competition, but if it wants to become a universal solution it will have to also support merchants who might be accepting more than a few daily payments. The new app should please the company’s existing customer base, but whether it catches on with merchants who are assessing solutions like Square will be the bigger question.