Nobody wants to be in charge of making a group purchase, having to take on the expense up front and then chasing down your friends and loved ones to kick in their shares. Camilo Acosta, Co-Founder and CEO of PayByGroup, started his software company to change that equation, providing a service that “splits the bill” for just about any online purchase you can imagine. He recently spoke with PYMNTS about PayByGroup’s business model, benefits, and plans for the future.
PayByGroup is a software company that is said to become the PayPal button for groups. How did you come up with the idea?
CA: My co-founder and I have always been the organizers for our group of friends. We’re the ones who get everyone together for trips, or parties, or the rec league football team – things like that. We always faced the hassle of having to get commitment from people and getting the money together…and we realized that there had to be a better way.
If you go to a restaurant, you can put five credit cards down and split a bill pretty easily. But you can’t do the same thing online. It just seemed kind of absurd that, 15 years after the advent of PayPal, you couldn’t do that. So we decided to build it ourselves.
Can you give us some examples of how PayByGroup works, as well as the tangible benefits your partners can receive?
CA: We integrate directly as a checkout option on merchant websites. People can use us when they’re paying for a vacation rental, for example, or buying season tickets for a sports team, or whatever it is that they want to do. We deal with a lot of gift situations in retail, such as where a group of siblings want to buy a gift for their mom for Mother’s Day: they can come together around that purchase directly at the checkout.
The benefit for merchants is that they get a lift, which occurs for a couple of reasons. One, consumers are more inclined to buy because they’re seeing items that are now more affordable to them because they’re not taking on the whole cost: if it’s a vacation rental that was simply too expensive to put on a single credit card and later get paid back, now they realize that there’s an option for them to split it up front so no has to bear that burden.
In addition, people can actually get more expensive items, because now there isn’t that financial risk. Instead of springing for the $80 gift, groups can pool their money together for a $600 gift. Everyone’s paying a little bit more, so we’re increasing the average order value by 16 percent.
What tools or strategies do you have in place to protect customer data?
CA: We actually plug into our merchants’ processors and gateways, so we never touch the credit card data. It’s all vaulted by those other guys. That’s one of the benefits of what we do: we don’t actually handle sensitive customer data ourselves; instead, that’s done by our partners’ existing security systems.
Why should businesses partner with PayByGroup instead of going directly to market?
CA: It’s very hard to build what we do.
Payments is a very complicated arena, as you know, and even just one transaction can have so many complications, whether it’s an expired card, or fraud, or chargebacks, et cetera. Take whatever the complexity is and multiply it by five – because we have on average five participants per transaction on PayByGroup – and you’ve made it that much more complicated.
On top of that, we’re very much a social engine in the back. We’re emailing people to remind them to participate; we’re showing them who else is participating in a purchase; and we’re creating that peer pressure to participate. There’s a lot more going on underneath the surface.
Looking ahead, what does PayByGroup have in the works that you can disclose?
CA: We’re working with some of the biggest retailers in the world on something coming up later this year.
Additionally, we’re launching on HomeAway and VRBO – which is pretty exciting, seeing as they’re the No. 1 vacation rental marketplace in the world. That should be a pretty good way for a lot of people to get to use PayByGroup in situations where it’s really needed.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More