WePay Debuts Veda, An Intelligent Risk Engine That Leverages Social Media Data To Prevent Merchant Fraud

Posted: May 9, 2013 in Technology

Online payments startup WePay is announcing the
launch of Veda, an intelligent social risk engine that
leverages social media data as well as traditional
business data to catch merchant fraudsters. As we’ve written in the past, Y Combinator-backed
startup originally formed to make it easier for groups
to collect money and make payments together. But
recently WePay pivoted slightly to become ultra-
simple platform for businesses to collect and manage
payments online. The startup added support for event registration and ticketing, custom invoicing,
donations, mobile payments and e-commerce. Last year, the startup rolled out a white-label
payments API and lowered its prices to court third-
party developers and debuted an easy way to embed
in-line payments. Founder Bill Clerico explains to me that fraudsters
attempt to steal billions of dollars online. Often,
fraudsters will set up an account acting as a
merchant, and will solicit payments from consumers.
So payments companies like WePay have to conduct
in-depth security assessments to determine whether a merchant isn’t attempting to commit fraud. Veda is a more data-focused way to underwrite
merchants and make sure they are actually verified
sellers. Clerico says, “A traditional credit score only
shows a sliver of who you are, but an online profile
allows us to assign our users a more accurate
‘WePay credit score’ based on their personal history of verified, social data. Veda’s intelligent brain is the
new, smarter way to assess risk.” Veda uses data from social networks such as
Facebook, Twitter and Yelp coupled with proprietary
algorithms to mine and analyze a merchant’s social
signals to gain a more accurate picture of risk. Veda
uses pattern recognition, integrated support data, and
automatic cross-referencing to analyze risk. Veda needs five pieces of information (versus the 21
some payment companies require) to get started: first
name, last name, name of business, email address,
and phone number. Merchants can be approved within
minutes. WePay says that this patent-pending technology is
already analyzing over 250,000 transactions per
month. And since October 2012, Veda has stopped
more than $30 million in attempted fraud. WePay isn’t the first payments company to start
using social data for risk assessment–Max Levchin’s
Affirm is also using social data on the consumer end.
Signifyd is also using social data for risk assessment
in payments. WePay has raised a total of $20 million since being
founded in 2009, including a $10 million round led by
Ignition Partners that it announced last year. Other
investors include Highland Capital Partners, August
Capital, and angels such as Levchin, Ron Conway,
Dave McClure, and Steve Chen.


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