AlertPay Targets Affiliate Marketers and Grows Business Where PayPal Doesn’t Go

Ferhan Patel and his brother Firoz started AlertPay in 2004. The brothers found a niche and pain point with affiliate marketers and MLM businesses, many of which ran the risk of having their accounts frozen by PayPal for being in violation of PayPal’s user agreement. Whether those businesses were in violation or not, AlertPay became a friendlier, more easily accessible option. The company is now adding 5,000 new members daily and scaling aggressively. It’s been 6 years of toiling away, growing their business and meeting specific market demands.

The company is nowhere near the size of PayPal, nor is it clear whether or not they’ve got that level of scale in their sights, but it’s an impressive feat all the same to go into a space as complicated and challenging as online payments. They’re now working on adding developer tools to make AlertPay more attractive for e-commerce stores to include as a payment option. The goal overall is to expand the brand and make sure more and more people know that AlertPay is a legitimate payment processor.

NextMontreal: When and why did you start AlertPay?

Ferhan: The idea of AlertPay started in 2004, and we officially launched and went live in June 2005. Before 2004, we were in the business of developing
affiliate tracking software (referral tracking software) for 2 years and during this time, many of our clients kept running into problems with PayPal shutting down or freezing their accounts due to their business involving affiliates. It wasn’t until our own company’s PayPal account was frozen that we felt the pain of our own clients. We realized a serious need in the market for another payment platform, and AlertPay was founded.

NextMontreal: Why was PayPal shutting down so many accounts, including your own?

Ferhan: It had to do with their interpretation of Multi-Level Marketing in their user agreement. Any business that was structured in an affiliate model, or similar model, ran the risk of being in violation. When your account gets frozen and all your funds held for 6 months, it can destroy your business as it did for many of our customers. This was a consistent complaint against PayPal from numerous merchants.

NextMontreal: What’s your background, and the background of your co-founder?

Ferhan: Business has been in our blood since we were young. My family operated a grocery store when we were growing up and, at the same time, a home-based
needle trade business. My parents always ran their own business and worked countless hours to provide for us and give us a better future.

I studied Commerce at Champlain College, and went on to receive a Bachelor of Computer Science from Concordia University. I also have a certificate in Project Management from McGill University.

Firoz, (CEO) inherited his entrepreneurial spirit from our family roots and has been doing business since high school, starting off by selling comic books. From there he went on to complete a degree in Business Administration from Champlain College. His experience includes working as a technology officer for a business expense tracking software company, to sales processing.

After graduating from university, I joined Firoz in his processing business to develop our own affiliate software solution that would help e-commerce merchants track referrals and affiliate commissions.

NextMontreal: How was AlertPay originally financed? Have you ever raised external financing?

Ferhan: Believe it or not, during the R&D phase of developing the application for AlertPay.com between 2004 and 2005, we (founders) actually had to fire
ourselves to maintain enough funds to pay for our developers. During this time, to make ends meat, I took on another job at an IT consulting company working there during the days, and putting in my nights and weekends to work on AlertPay. We’ve always been self-financed and put everything we had to get it off the ground.

NextMontreal: How is it different from PayPal? Seems like a big gamble to go after a giant like that.

Ferhan: We’re different from PayPal in quite a few ways and we’re also quite similar. We’re different in terms of our business model, the types of
businesses we support, more funding options, more withdrawal options, more currencies, and we support more countries than PayPal to receive payments.

When we first started AlertPay, we never planned to compete against PayPal. We planned to just service a market need that PayPal was neglecting or
servicing poorly.

NextMontreal: Why did PayPal ignore the affiliate market, which is where you seem to have found a niche? And are they still ignoring that market?

Ferhan: I don’t think they ignored the affiliate market, but they took a very strict approach with it due to the bad seeds in the industry. A lot of people still distrust PayPal with their funds if their business has an affiliate program or follows a MLM structure. We were fortunate enough to get involved at the time we did and fill that need, and continue to fill that need today. I doubt it hurts their bottom line in any way, and we’re happy to take on this business.

For more information about AlertPay. Click here.

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