Online payments startup WePay is announcing the launch of Veda, an intelligent social risk engine that leverages social media data as well as traditional business data to catch merchant fraudsters.
As we’ve written in the past, Y Combinator-backed startup originally formed to make it easier for groups to collect money and make payments together. But recently WePay pivoted slightly to become ultra-simple platform for businesses to collect and manage payments online. The startup added support for event registration and ticketing, custom invoicing, donations, mobile payments and e-commerce.
Last year, the startup rolled out a white-label payments API and lowered its prices to court third-party developers and debuted an easy way to embed in-line payments.
Founder Bill Clerico explains to me that fraudsters attempt to steal billions of dollars online. Often, fraudsters will set up an account acting as a merchant, and will solicit payments from consumers. So payments companies like WePay have to conduct in-depth security assessments to determine whether a merchant isn’t attempting to commit fraud.
Veda is a more data-focused way to underwrite merchants and make sure they are actually verified sellers. Clerico says, “A traditional credit score only shows a sliver of who you are, but an online profile allows us to assign our users a more accurate ‘WePay credit score’ based on their personal history of verified, social data. Veda’s intelligent brain is the new, smarter way to assess risk.”
Veda uses data from social networks such as Facebook, Twitter and Yelp coupled with proprietary algorithms to mine and analyze a merchant’s social signals to gain a more accurate picture of risk. Veda uses pattern recognition, integrated support data, and automatic cross-referencing to analyze risk.
Veda needs five pieces of information (versus the 21 some payment companies require) to get started: first name, last name, name of business, email address, and phone number. Merchants can be approved within minutes.
WePay says that this patent-pending technology is already analyzing over 250,000 transactions per month. And since October 2012, Veda has stopped more than $30 million in attempted fraud.
WePay isn’t the first payments company to start using social data for risk assessment–Max Levchin’s Affirm is also using social data on the consumer end. Signifyd is also using social data for risk assessment in payments.
WePay has raised a total of $20 million since being founded in 2009, including a $10 million round led by Ignition Partners that it announced last year. Other investors include Highland Capital Partners, August Capital, and angels such as Levchin, Ron Conway, Dave McClure, and Steve Chen.