Who Powers The Matchmakers?

Matchmakers are only as good as the infrastructure and services that keep their matchmaking engines humming. Bill Clerico, cofounder and CEO of WePay, explained the importance of bringing the “picks and the shovels” to the matchmakers’ gold rush in this week’s The Matchmaker Is In series, with hosts Karen Webster and “Matchmakers” author David Evans.


Matchmakers are hot. In fact, the growing popularity of these intermediaries that make it possible for multiple stakeholders to find each other and transact is described by some as this decade’s gold rush.

And like the Gold Rush of the 1840s, there are those who dig for the gold and those who provide the tools and the supplies that give the miners all they need to strike it rich.

In this week’s The Matchmaker Is In series, hosts Karen Webster and David Evans, economist and author of “Matchmakers: The New Economics of Multisided Platforms,” discuss the unique aspects of those players who power the infrastructure and services behind matchmaker platforms.

“You can either be one of the gold miners in the platform gold rush, or you can sell the picks and shovels,” said Bill Clerico, cofounder and CEO of WePay, who shared his firsthand insight into what it means to play the role of enabling software companies and online marketplaces to offer payments to their users.


Selling The Picks And The Shovels 

WePay is in the picks-and-shovels business.

Though the company started with a focus on solving for a person-to-person payments use case, Clerico said he soon faced the complexities that surround the whole process of moving money around.

“I like to call it an iceberg, where 80 percent of the work was done below the surface of the water on the back end to just deliver that 20 percent of functionality that the end users needed,” he said.

It was then that Clerico recognized that all of the technology WePay built on the back end to support its own matchmaker business could be more valuable to those who had ambitions to be matchmakers.

At that point, Clerico and WePay pivoted from being a gold miner to supplying miners with the tools they needed to more efficiently and successfully find their own gold.


What Makes Matchmakers Unique

Powering payments for a matchmaker requires a different set of skills and capabilities. Unlike single-sided businesses that have inventory and sell that to a buyer who visits their site, matchmakers have a bunch of buyers that need their credit cards charged and, at the same time, have a bunch of sellers that need to receive payouts.

This interdependency — characteristic of all matchmakers — in commerce produces an environment that can be ripe for fraud.

Fraud occurs — and with great frequency — Clerico said, when fraudsters pose as both a buyer and a seller. These enterprising criminals purchase products from themselves with stolen credit card information and then walk away with the huge payout.

This leaves matchmakers footing the bill for both the payout and the chargeback that happens when the legitimate customer realizes an unauthorized transaction has taken place with their payment information.

Clerico pointed out that it’s much tougher to solve the fraud problem for these matchmakers because fraudsters can actually get cash out of the system.

“Across all of our partners, we’ve seen millions of attempts to defraud them, and that’s one of the core problems that we have to solve for our matchmaker clients,” he added.

Fraud, Clerico pointed out, also acts as a focal point for some of the other issues facing matchmakers, including their inability to onboard merchants as quickly as they might like.

“The reason that it can be hard for marketplaces to sign up sellers isn’t because marketplaces like to make it hard for sellers to sign up; it’s because they need to get enough information up front to make sure the seller is legitimate to prevent fraud,” Clerico explained.

This is why Clerico said one of the most important things that a platform that powers payments for a matchmaker must have is outstanding fraud technology and the right data and tools so that they can manage it on behalf of its matchmaker stakeholders.


Pricing For Value

Another unique consideration that WePay, as a platform that powers payments for matchmakers, makes is how it prices its services.

It’s tricky, Clerico said, because different matchmakers make money in very different ways. That means that WePay can’t offer a “one-size-fits-all” solution for its platform partners.

WePay charges transaction fees, which are then typically shared with platform partners, depending on what services they need and what business they’re in.

For some matchmakers, payments is a huge driver of revenue, but Clerico noted that, for others, payments is just an ancillary service and not something they want to make any money from.


Mobile For Matchmakers

One of WePay’s challenges as a provider of matchmaker infrastructure is making sure that it remains one step ahead of what matchmakers will need to make their interactions with their buyers and sellers easier and more efficient.

Today, Clerico said, that is mobile.

With the explosion of mobile, platforms have been able to enter many new markets and facets of the economy they never could before, he explained.

But there are still major challenges when it comes to interacting on mobile, including the ability to collect as much data from end users on small mobile devices as they would enter on a desktop.

Which Clerico acknowledges is still a work in progress.

“We’re always thinking about how we can make the [mobile] experience easier and more frictionless, specifically around mobile, because that’s been such a transformational force for matchmakers,” he added.

Mobile isn’t the only thing matchmakers are asking for when it comes to enhancing and strengthening their platforms. Clerico said their requests include APIs that enable great user experiences, international capabilities and value-added services.


Where Matchmakers Are Headed

Clerico’s belief is that the next big wave of innovation in the matchmaker space will come in the form of software products that can be powered by payments to transform an entire industry segment.

While it may not get as much attention as the “Ubers” and “Airbnbs” of the matchmaking space, Clerico said that small business software unleashes new opportunities for businesses to reinvent their trading partner relationships.

Injecting payments, he said, into those relationships offers immediate value — a concept that Clerico says will make its way into almost all software into the next five to 10 years.


Cracking The Matchmaker Code

As a matchmaker turned power player to thousands of matchmakers, Clerico has had an unusual ringside seat into what makes a matchmaker sizzle or fizzle. Success, he says, can be attributed to one simple concept.

“The best platforms find ways to offer immediate value to suppliers before the buyers even come, then they can focus on attracting buyers,” Clerico explained, citing the example of a software productivity tool that helps suppliers do their jobs better.

“The ones that fail don’t have a clear strategy about how they can add value before the network really takes off.”



The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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