The platform economy, along with the software that powers it, has just been given a new and less costly way to pay.
WePay announced today that it now offers its customers in the U.S. the ability to accept secure Automated Clearing House (ACH) payments (in addition to credit card payments). Among WePay’s customers are software platforms that look to WePay to power their payment capabilities to their downstream channel partners. Offering those customers a “Pay by Bank” button makes WePay the first company in the platform payments sector to do so.
Payment via ACH is particularly well-suited for high-dollar transactions in which buyers want to spend above their credit card limits, sellers want to reduce transaction fees and the advantages of consumer credit, like buyer protection, are irrelevant. Such purchases commonly occur in (among others) the area of home remodeling — the business of one of WePay’s channel partners, BuilderTREND.
As WePay Cofounder Rich Aberman told MPD CEO Karen Webster before launch, “One of the challenges [that BuilderTREND faces] is trying to convert what are traditionally cash- and paper-based payments to electronic payments. What WePay has done is build an ACH checkout experience that is real-time and not asynchronous,” he stated. “A payer just needs to choose their bank [and] provide their login credentials."
WePay then verifies the bank account in real time and — after assessing risk information about the bank account — processes the transaction.
Aberman describes WePay’s ACH service as “not unlike the ‘pay with bank account’ experience on PayPal or through Dwolla. What’s different is that we’re enabling [our partners] to offer it as if they were PayPal — as if it were just part of their service."
Explaining that WePay’s published rate for the ACH service is 1 percent plus $.30, Aberman tells Webster that his company “empower[s] our channel partners to set pricing that makes the most sense for their particular use case."
He also acknowledges the risk implications affiliated with ACH that don’t exist in credit card payments, which WePay takes on for the users of its service.
"We are incurring greater risk on [ACH] transactions,” and offering protection from it, Aberman notes, “to make the funds available faster than companies that traditionally have those funds available by working directly with an ACH-originating bank."
WePay’s dual motivation in facilitating ACH payments, says Aberman, was to build the experience for its partners and empower them to sell it as a feature of their own product offerings.
For companies that partner with WePay, he explains that “we’re incurring that cost and that work, and we’re giving it to them as a service, so that they can focus not on building the best ACH acceptance” but rather on providing their best service to their own customers.
"Then they can rely on WePay to take advantage of all the innovation happening in payments,” concludes Aberman. “We’ll build that, and we’ll give them the benefit of it. That’s kind of our job."