There’s a bit of news from WePay, a Palo Alto payments startup we’ve been following for years, that shows just how quickly everyone, small business owners included, is shifting their online work from the desktop Web to their mobile devices.
Last week WePay released its first mobile app (iOS only for now). It lets owners and employees of small businesses generate invoices and process credit card payments from their smartphones or tablets.
That might sound a lot like the service merchants get from Square or Intuit’s GoPayment, but WePay CEO Bill Clerico points out that those system use an external card reader to speed up transactions. In WePay’s app, merchants enter credit card numbers the old fashioned way—by tapping on a numeric keypad.
“If you’re running a food truck or something where you have hundreds of customers a day, there is no way you’re going to use our app,” Clerico says. Rather, WePay’s app is aimed at businesses with 10 or fewer employees that currently collect most of their payments by check. “I think our biggest competitor is paper,” Clerico says.
Here’s the kind of scenario where WePay thinks its app will come in handy. Say you’re Betty the dog walker and you walk Wilma’s dog five days a week, but you rarely see Wilma herself. With the WePay app, at the end of the month you can put in Wilma’s e-mail address, enter the amount she owes you, itemize the charges if you want (20 walks at $25 per walk), and send off an invoice.
Wilma gets a professional-looking e-mail with a button that lets her pay online via credit card. WePay processes the payment and the money ends up in Betty’s bank account, minus WePay’s fee of 2.9 percent plus 30 cents per transaction. If Betty ever runs into Wilma in person, she can also just enter Wilma’s credit card number straight into the app.
“At the end of the day, people want to receive payments in multiple ways, and this is just a way to speak to that,” says Clerico. “I think as time goes by [payments] will become more and more about mobile and less and less about the Web.”
Clerico admits the mobile payments market “is very noisy”—a point my colleague Greg drove home just yesterday—but he thinks most of WePay’s competitors have overlooked the small business market, including people like designers, babysitters, masseuses, accountants, and other independent contractors. There 14.2 million such businesses in the U.S., taking in $1.1 trillion a year in payments, according to WePay.
For WePay, which has 50 employees and has raised about $19 million in venture funding, getting into the mobile game represents yet another step away from its original legacy as a group payments startup that helped people collect money from their friends. Over the last couple of years, the startup has taken on PayPal and other giants by building an easy-to-use online payments platform focused on small businesses (a story shared by WePay co-founder Rich Aberman at Xconomy’s Power of the Pivot event in December).
The company’s three strengths, in Clerico’s eyes, are simple, easy-to-use products; high-quality customer service; and, underneath the hood, technology for evaluating fraud risk that lets it bring on new merchants quickly, without the need for the lengthy background checks that are usually required before a business can start processing credit card payments.
“If you didn’t accept credit cards before, you can download our app and change that literally in a few minutes,” Clerico says. “There’s no reason for folks not to accept credit cards anymore.”
Clerico says he hopes getting the app into the iTunes App Store, where it will show up alongside apps like PayPal Here, Intuit GoPayment, Square Register, and bank apps like Chase Mobile and Bancard’s PayAnywhere, will put WePay in front of a whole new group of potential users who might not have discovered the company online. “We’re really excited about using mobile as a channel to acquire new customers,” he says.
