Online payments startup WePay is today announcing lowered pricing and new API features, as it celebrates the one-year anniversary of its WePay Payments API. The company, which is backed by $19.2 million in venture funding, is actually a bit older than just one year, however. As you may remember, WePay first emerged from Y Combinator in 2009 as a simple tool to collecting group payments. The company has since grown beyond group payments, and even beyond payments themselves, with added support for event registration and ticketing, custom invoicing, donations and online stores.
But the WePay Payments API remains a key piece to the company’s business, enabling merchants and individuals to integrate WePay’s service in their own websites and applications. This allows them to accept payments without the need for a pre-existing merchant account. Today, the API accounts for roughly 25% of WePay’s business.
With today’s newly launched tokenization API, WePay is targeting a broader group of potential API partners who want to better control their checkout experience. Tokenization will appeal more to larger companies want WePay to be invisible to their customers, while still using the service to process payments on the backend. Up until now, partners only had access to an iFrame API, which did allow for on-site payments without a redirect, but it was still something of a co-branded experience. Tokenization is the full white label option.
While iFrame users eliminated the need for PCI compliance, tokenization customers will still greatly reduce their need related to PCI compliance – the partner only has to fill out some basic paperwork for PCI compliance (the SAQ-A, or “self assessment questionnaire”).
Also new today is a series of step-by-step tutorials which will help developers get started with the API’s integration. And to further push API adoption, WePay dropped its rates from 3.5% to 2.9% + $0.30. There are no setup or monthly fees involved, the company says. WePay CEO Bill Clerico tells us that the rate drops are related to the company’s growth – as it has scaled up, it can now negotiate better rates and then pass those on to customers. But the change also puts WePay on a more even playing field with PayPal, whose merchant fees are also 2.9% + $0.30 per transaction.
Since the API’s launch a year ago, over 1,000 applications have been built on top of it, including BookFresh, GoFundMe, Venyooz, and Fundable, to name a few. Some, like GoFundMe, actually replaced PayPal with WePay as their default means for accepting online payments. According to Clerico, a lot of WePay’s customers are former PayPal customers. “We’ve found that PayPal has failed to innovate around the user experience,” he says. “These platforms really care about the user experience they offer their customers, and they can’t deliver the user experience they want with PayPal. So they rip out PayPal.” He notes that the solution is especially popular among crowdfunding sites and small business support sites, and is now making a big push into marketplaces as well.
WePay had previously reported it grew the revenue generated by the API by 15 times in 2011, and it exited the year with a multi-million dollar revenue run rate. While Clerico declined to provide hard numbers, he says that WePay is processing “hundreds of millions of dollars” annually, and the API is now the fastest-growing segment of the business.