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- Account stability issues
Who remembers the Occupy Wall Street protests from the autumn of 2011? Although I certainly do, I was unaware of the massive crowdfunding operation behind this movement. That is until I came across its chosen payment processor: WePay.
WePay has exuded a plucky, anti-establishment vibe since its early days. The payment facilitator was founded in 2008 by Rich Aberman and Bill Clerico as an alternative to PayPal for peer-to-peer payments, dues collection, and fundraising. WePay has shifted to a more behind-the-scenes role now, as you’ll see. Throughout its evolution, WePay also underwent multiple rounds of fundraising on its behalf, amassing over $75 million in venture capital.
WePay is a third-party payment facilitator (rather than a direct merchant account provider), placing it in the same category as Stripe, PayPal, and Square. As you’d imagine, this is an extremely competitive space. Currently, WePay differentiates itself by serving both as a payments processing website and a platform partner.
Let’s take a moment to define that term — platform partner. First of all, we’re talking about software platforms, not the physical kind made of wood or metal. We’re referring to any online space where lots of business owners, sellers, or fundraisers go to conduct some aspect of their business. Here are some of the types of platforms WePay partners with, along with an example of each:
- Event Management (ConstantContact)
- Accounting/Invoicing (FreshBooks)
- eCommerce/Shopping Carts (Ecwid)
- Fundraising (GoFundMe)
So, say you are a merchant who uses the FreshBooks software platform for your accounting and invoicing needs, but you also need a way to accept credit cards for your invoices. Or, what if you are managing a list of attendees for a conference in ConstantContact but need a way to collect payment from those attendees? Or, maybe you’ve got an online shop all set up via Ecwid, but you still need to decide how you’re going to accept payments from your customers.
This is where WePay comes in. WePay’s goal is to have its payment facilitating capability already embedded inside the platforms that merchants use every day. Merchants can then quickly and easily start accepting payments without ever leaving the software platform they were already using. As a small business owner, you can’t sign up for WePay in isolation, as you might with PayPal or Stripe. Instead, you’d only encounter WePay if you happened to use one of its partnered platforms.
WePay takes this specialization in platform partnerships even further. Aside from exclusively embedding payments directly into platforms, it also supplies each software platform with its own, self-branded payment solution. For example, WePay’s partner Freshbooks (see our review) now offers a payment solution called Freshbooks Payments by WePay.
WePay calls this setup “white-label” payments for platforms, and it provides certain advantages to the platforms themselves, to the merchants who use the WePay-powered payment solution inside these platforms, and even to the end-user making the payment. We’ll touch on these benefits throughout the review.
Although facilitating fundraising for Occupy Wall Street originally put WePay on the map, the latest twist in WePay’s story came at the end of 2017 when it was bought by one of the biggest banks in the world — JP Morgan Chase. Whether or not this means WePay has officially sold out to The Man, there’s no escaping the obvious irony.
Since this change, we’ve noticed that WePay has not been spared from grappling with common issues among all payment facilitators (held funds and account instability, for example). Still, more and more platforms are deciding white-label payments are the way forward, and many choose WePay for that specialization. I admire WePay’s refusal to quit amongst such entrenched competitors, but I’m not 100% convinced the company even has itself figured out yet!
It’s worth pointing out that the audience for this review will likely be both platform owners who might partner with WePay and the merchants who use these software platforms. If you don’t find yourself in either of these two categories, but you still need card processing services, I’d suggest checking out our top merchant account providers.
There’s no denying that the multiple layers of the platform economy make reviewing WePay a bit of a hairy endeavor. Nevertheless, I’m confident we’ve gathered some good information to help you decide if WePay is worth considering for your situation.
For a quick overview, take a look at WePay’s introductory video:
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Table of Contents
Products & Services
As you read about WePay’s features, don’t forget that WePay targets the platform owners themselves, not merchants using the platforms. Similar to WePay’s website, this section of the review is written so platform owners can understand what WePay offers. Still, I think merchants will benefit from knowing more about how platform payments work. I would not recommend skipping this section — or any section for that matter!
WePay’s website is sparse on descriptions of specific products and features. They’re more interested in explaining the overall value proposition of integrated platform payments. Here is my crack at summarizing WePay’s key offerings for platforms:
- Payment Processing: WePay is a third-party processor like Stripe or Square, as opposed to a traditional merchant account provider. WePay’s FAQs state that they currently only support US-based merchants and a growing number of Canadian merchants on a few platforms. However, we’ve noticed that WePay also has a merchant agreement for UK-based merchants listed on their Terms of Service page. They also have developer documentation for setting up UK merchants. This tells me that UK merchants can also use WePay and that the information on their webpages is most likely out of date.
- “White-Label” Payments: As a platform, you’ll get your own, self-branded payment solution when you partner with WePay, without the hassle of actually becoming a payment facilitator yourself. Your brand-name payments service will still probably have “Powered by WePay” as part of its logo. I like to think of it as more of a “gray-label.” Another common industry term is co-branded.
- Developer Documentation/API: WePay describes itself as a payments API company. As such, the developer section of the website is the best place to find concrete information about WePay’s capabilities and how they can be customized to suit your needs.
- Simultaneous Onboarding: Platforms can set up their onboarding process to include WePay’s onboarding process, minimizing extra steps for merchants. As the Merchant Onboarding Overview explains, the partner platform has the option to set up WePay for all new merchants, with further verification steps required after merchants are already selling.
- Revenue From Payments: Platforms may have the opportunity to add their markups to transaction fees. See more on this in the Fees & Rates section of this review.
- Risk Management & Fraud Protection: WePay claims to provide 100% coverage of a platform’s payments-related risk. This means that they’ll cover fraud losses and chargebacks. They also secure payment and customer information, which helps platforms achieve and maintain PCI, KYC, and OFAC compliance.
- Mobile Point Of Sale (mPOS): WePay enables white-label, mobile POS for platforms. Merchants use the platform’s app and mobile hardware to collect payments. Here again, I’d refer you to the mPOS developer section of WePay’s site for the best information. A few highlights:
- Customizable EMV-Certified Card Readers: Choose between the Moby 3000 reader or RP350x, both by Ingenico/ROAM.
- iOS & Android SDKs: Integrate payments into the platform’s mobile app.
- Fulfillment Service: This lets the platform ship readers directly from WePay’s warehouse to merchants.
- Apple Pay: Add this capability to the platform’s regular website in addition to the mobile app.
- Customizable Payouts: Platforms can choose to allow merchants daily, weekly, or monthly payouts.
- Automatic Account Updater: Merchants can retain more recurring customers with an account updater for expired and replaced cards.
Fees & Rates
WePay does not list any pricing information on their website. I have to admit, however, that this isn’t too surprising considering WePay’s more complex business model.
Since WePay is a “white-label” payments provider, they work with each partnered platform individually to determine the pricing. Then, that platform communicates pricing plans to its merchants.
Once platforms have their pricing worked out with WePay, they are free to set their fees for transactions processing and exceptions processing. This means that platforms may choose to charge an additional fee on top of WePay’s rates.
In WePay’s Merchant Terms of Service, they include a few basic rates and fees that WePay will charge if the platform does not choose to negotiate a specific rate (we suspect that platforms can negotiate rates that are lower than these basic rates). Here are the basic rates that WePay charges:
- Per Transaction: 2.9% + $0.30
- Chargeback Fee: $15.00
- ACH Return Fee: $15.00
- Research Fee: $25.00 (charged if an account is deemed abandoned)
WePay also mentions that they will pass through fees for “Payment Network Liabilities” to the merchants. You can read more about those fees in Section 8 of the Terms and Conditions.
Keep in mind that the rates I’ve listed above are just examples of WePay’s basic rates. The rates and fees the platform pays depends on its agreement with WePay. In the same way, the rates and fees that merchants pay depend on their platform.
If you’re a merchant looking to process payments through one of WePay’s partnered platforms, be sure to look into the specific rates and fees offered by your platform. Those are the costs that will be the most relevant to your situation.
Before we move on, I want to quickly mention one other notable fee. In 2015, WePay introduced a rate of 1% + $0.30 for ACH payments via partner platforms. When we checked in 2016, we were able to verify that the rate had remained the same. At the time of this review update, we are not able to find any information on rates for ACH payments, but we wouldn’t be surprised if it was still 1% + $0.30.
Contract Length & Early Termination Fee
Here, we will mainly focus on the merchants using WePay’s partnered platforms. I’m sure the platforms themselves have special contracts dictating their relationships with WePay, but we’re not privy to those. Instead, we have access to Terms of Service agreements for merchants in the US, Canada, and the UK.
These documents rightfully point out that even if a platform is offering white-label payments, the platform itself probably also has a separate merchant agreement with terms and conditions for use of the software. Bottom line: both the platform’s general-use agreement and WePay’s Terms of Service (just for payments) are important documents to understand.
Sections 26 through 28 of the WePay Terms of Service address account termination. As a merchant, you may cancel WePay’s payment service at any time with no early termination fee. While you’re looking through the rest of the terms, be sure also to note WePay’s policies on payout holds and account closures. You should also take a look at WePay’s Reserves FAQ, which covers both reserves and payout thresholds. These are common points of contention and misunderstanding when it comes to merchant aggregators — WePay included.
Sales & Advertising Transparency
Now, we’re back to examining WePay’s relationship with platforms, since it doesn’t advertise directly to merchants anymore. I know this is a lot of focus-shifting in one review. Don’t blame me — blame the multi-layered platform economy. Merchants should stay engaged for this section, though. You want to know what type of company you’re dealing with for payments.
Despite any shortcomings, WePay is not a sleazy, scammy, or dishonest company. I’m still disappointed that they don’t publish pricing anymore, especially when more visible competitors do offer some hard figures. While pricing may be complicated with platforms in the mix, WePay needs to figure out a way to increase online transparency on the pricing front.
The great news about fully-integrated payments with WePay is that merchants are spared from aggressive sales agents, flashy ads, and gimmicky deals. It’s up to the software platform to “sell” its own co-branded payments provider over any others it may offer. I also like that WePay’s Terms of Service are posted, and they’re pretty easy to read. WePay has done us all the favor of simplifying all the legal jargon in a “Basically…” phrase to the right of each section. You should still do your due diligence, though, and read the Terms of Service in its entirety. You don’t want to miss important fees and requirements by just reading WePay’s paraphrasing.
All in all, WePay is doing all right in terms of transparency, but there’s still room for improvement. For example, we’d like to see the website updated with some more complete and current information. And we also want to see pricing information provided in some form or another.
Customer Service & Technical Support
In theory, WePay and its partnered platforms work together on behalf of merchants and their customers to provide support. It should help that WePay and the platforms have access to each other’s data and support records. It’s all a great theory, but it makes you wonder how well it works in reality. The answer seems to be: it depends.
Whether you’re a merchant or customer, I don’t see established guidelines for contacting the platform versus contacting WePay for support. WePay provides an email ticketing system as well as links to customer support pages for various platforms, all on its contact page. You’re invited to make the decision yourself on which route to take.
WePay’s “Customer Delight” support team (yes, that’s its actual name) is available 6 AM to 6 PM PST Monday through Friday. That time frame refers to email ticket support only. WePay indicates they’ll respond to inquiries within one business day. Live chat was offered at one point but has now vanished. The same goes for a phone number — gone. I sort of understand why big merchant aggregators avoid phone support but that doesn’t mean I have to like it.
The Knowledge Center offers up a few guides and white papers that are helpful for understanding payments processing in general. However, these resources don’t give any specific information about using WePay on a day-to-day basis, which is really what I’m looking for. Honestly, I think these resources would have worked better as posts in WePay’s blog.
Fortunately, the Support Section has some decent FAQs and even answers a few questions regarding partner sites. WePay also maintains active Twitter and LinkedIn pages.
I admit I was a bit surprised to learn that WePay’s Customer Delight department won a Stevie Award in 2017. Overall, I’m underwhelmed by the support WePay provides. It’s a confusing setup for merchants and end-consumers, and the lack of phone support seems to be a common frustration among users. But maybe WePay offers outstanding support in their web tickets, winning them that award. Let us know in the comments below about your own experiences with WePay’s customer support. Were you delighted?
Negative Reviews & Complaints
WePay maintains an A+ rating with the BBB, with 82 registered complaints in the last three years (24 in the last 12 months). Of these 82 total complaints, WePay was able to resolve 20 to the merchants’ satisfaction. Overall, 82 complaints is a fairly low number about a third-party processor that serves so many people. And while a 25% complaint resolution rate isn’t the best we’ve ever seen, it’s a respectable number. All this sums up to a pretty good record at the BBB.
However, this doesn’t mean that WePay users aren’t complaining elsewhere. A quick Google search uncovers hundreds more complaints and negative reviews. After combing through all the complaints I could find for the past two years, I was able to identify a few trends. Here are some common WePay complaints:
- Withheld Funds: Holds related to “high-risk” transactions often result in account cancellation. Relatedly, disputes over WePay’s reserve accounts also crop up occasionally. Several merchants have reported delayed and inadequate explanations for holds and terminations.
- Frozen Or Terminated Accounts: After quick initial approval, some accounts have been subsequently frozen or terminated. Merchants and WePay often dispute the proper interpretation of WePay’s business-type restrictions or whether or not subsequent verification requirements were completed properly. Problems refunding payments to customers and donors sometimes ensue.
- Long Processing Time: Some users are unhappy with the two to five day (or beyond) wait to receive funds when a “hold” is not in place.
- Poor Customer Service: Merchants say WePay’s customer support is slow to respond. In particular, merchants are frustrated by the lack of phone support.
All third-party processors have account stability issues to some degree. That’s one side effect of the approve-now-verify-later business model. And while we don’t like it, we recognize that the problem is not unique to WePay. It doesn’t hurt to read more about how to avoid holds, freezes, and terminations yourself.
This is a good time for another quick reminder to read both the platform’s and WePay’s Terms of Service and list of Prohibited Activities (Section 7 in Terms of Service). High-risk merchants may need an alternate, specialized merchant account.
Positive Reviews & Testimonials
While most complaints about WePay’s services seem to come from merchants, most positive reviews seem to come from end-consumers and donors. They often praise the help they received understanding WePay charges on their credit cards or resolving donation issues at crowdfunding sites. I noticed that these comments often praise the same support reps over and over. In particular, customers seem to appreciate a support rep named Mira. Raise a glass to Mira, everyone!
Positive feedback from merchants tends to highlight a few different factors. Here are the positive comments I’ve seen most often from merchants:
- Seamless Integration: WePay’s ability to integrate with established platforms makes it very easy for merchants to set up and use. Partners also love this quality of WePay.
- Lower Rates Through Some Platforms: Merchants on a couple of platforms commented that they were able to access lower processing rates with WePay than with another payment provider. These merchants tended to be using WePay through Zoho and Classy.
- Easy Checkout: WePay’s checkout process is simple and intuitive for the end-consumer.
To hear from the platforms themselves, you can turn to WePay’s website. You’ll find 11 video testimonials and case studies from partner platforms under the Customer Stories tab. They also occasionally interview partners for blog posts. The platforms tend to mention:
- Decreased friction in onboarding merchants to payments (within minutes!)
- Increased merchant “stickiness” to the platform long-term
- A general business boom after adding white-label payments
- Customization and control of the user experience for payments
- WePay’s niche understanding of platform needs
- Freedom to trust WePay with payments and focus on platform management instead
As a third-party payment facilitator, WePay has relentlessly sought its own niche among household names like PayPal and Stripe. With such intense competition for market share, I think targeting platforms was probably a wise move for WePay. In turn, WePay’s partnered software platforms and marketplaces appear to appreciate this specialization.
This doesn’t mean WePay has cornered the market on embedded, co-branded payments. Platforms can (and should) still shop around, and platforms must examine each payments provider in light of their unique pool of merchants. This is where aspects such as customer service, account stability, fraud protection, and geographical availability of the payment service come into play.
To make direct comparisons, you’d have to look at the platform-embedded, co-branded version of each payment service. Teasing out that specific feedback may be impossible, but I can still offer some general observations. If you are a merchant based out of any country other than North America and the UK, you’ll need to look elsewhere. A few options you might consider are Stripe, Braintree, and Adyen, which all cover merchants in loads more countries. Also, if you are concerned about account stability, you might consider finding a dedicated merchant account provider like CDG Commerce or Fattmerchant.
To sum up, I don’t think WePay is a bad option for either platforms or merchants. In its current state, I’m giving WePay 4 stars. Co-branded payments may be the way of the future, but WePay’s solution is not a magic bullet. I think it still pays to keep the payment field more open for now — for platforms to retain other third-party options, and for merchants, campaigners, and donation recipients to set up more than one payment method if possible.
My main advice to merchants is to remember that the quality of a platform’s payment experience is directly tied to the quality of the platform itself. This is especially true when the two are co-branded. You can’t evaluate one without the other (which made it tough to review WePay by itself!). Understand the Terms of Service for WePay as well as the Terms of Service for the platform it’s integrated with. Examine transaction fees for the payment solution within the context of the platform’s overall pricing structure. Look at the features and reputation of both companies. I wish you the best of luck!
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