People always ask for this, and the answer is always going to be "We won't disclose that." Publishing the cap table is invariably going to be net negative for the people on it.
To the limited extent that having rough numbers helps improve your estimation of what the payoff matrix is if you build a business to where it is worth $800 million: typically, the founders would split several hundred million, most employees would get $X0,000 to $Y00,000, and exceptionally early employees plus key executives (CEO, etc) walk away with a few million. The remainder (several hundred million) goes to the investors.
Braintree's numbers might be different due to their bootstrapped pre-funding trajectory or due to choices made by the founders, but ultimately their numbers are their numbers.
Wow, I was looking at Braintree when I found Stripe last year. I wanted something truly different from PayPal for my customers. Looks like I made the right call.
I suspect this is very good timing on the part of Braintree. With Stripe now actively rolling out across more than North America and with other low-overhead payment services starting to appear as well, Braintree were effectively trapped in no-man's-land with their existing business model. For start-ups and small businesses, they were way too heavy for even basic stuff like signing up compared to the new competition. For larger, established businesses, direct merchant accounts and other banking facilities are probably worth the hassle given the better margins available. If I were them and had an out like this, I'd take it in a heartbeat, too.
I heard that. As I've said before, people revere the PayPal mafia, but revile PayPal.
As it's been said by others here, this is certainly good for Stripe because more than a few Braintree customers will flock their way to avoid PayPal, but it also creates opportunities for other upstarts in this arena.
That being said, there is a certain amount of lock-in for these products, so while it's relatively easy for a business to transition their new users/payers from Braintree to Stripe/others, it's pretty painful to transition existing users/payers out of Braintree as all existing users would need to re-key their CC numbers and billing addresses.
Braintree offers data portability, so you can transition existing customers & credit cards to a new payment system easily. That being said, I see no reason to jump ship unless service deteriorates
If only PayPal had joined Braintree's "Credit Card Data Portability" initiative [1]. I'm betting that's dead now with them joining PayPal, if it's even still active. If it is, get your data out quick before PayPal can lock it in!
This has put me off of Braintree and on to Stripe, but not for the reasons you might suspect. You see, I still want to take PayPal payments from my customers who prefer it. But it doesn't seem like a good business to have all my eggs in one basket, and using a competing payment system gives me the ability to switch PayPal off if they try any shenanigans.
That's why I only code against Spreedly [1] instead of directly against any payment processor. One API instead of 53, switch processors just by changing a variable, and you can securely store customers' payment info without locking yourself into any processor's vaulting solution either.
Payment processors are in the risk business -- becoming a risky account to underwrite, or their making a mistake in evaluating the risk, means you lose your account, any money that hasn't yet made it to your bank, and any customer info you have stored. Because the processor bears all the risk for chargebacks and bankruptcies of its merchants, it's an extremely thin margin business.
Spreedly is in the secure API business. They don't care much about the health of your business, the risk associated with your transactions, or anything else the processors care about. They just have to pass around messages and get paid a fee every time they do. It's a fat margin business.
The risk of losing a Spreedly account is much lower than losing a payment account. The risk of Spreedly suddenly going out of business is much lower than the risk of a small merchant account provider/reseller going out of business. And if you choose to stop relying on Spreedly, they'll hand you all your customer data (securely) to take elsewhere, which most gateways with card vaulting refuse to do. It's not a choice of who to commit to, it's freedom from vendor lock-in.
A blog from the founder and CEO of Braintree Bill Ready explains that they will continue to work independently whilst adding value to PayPal's weak points; customer service and the younger consumer generation of customers. https://www.braintreepayments.com/blog/braintree-teaming-up-...
It doesn't make sense for Ebay to own 2 Paypals. The reason they bought Braintree in the first place is to extend their reach into a different market. Braintree customers chose Braintree because it is NOT Paypal. If I was you I wouldn't be worried too much. Just keep watching the quality of service you get from Braintree and if it starts going down too much, then change.
At Braintree we have always earned our merchants' business every day. We were the first payment platform to offer data portability, because we don't believe in locking in our customers, and that doesn't change. As we enter this new chapter, will we continue to earn your business with same great support you've come to expect and even more of the innovative technology you've come to love. Our support and accounts teams are still just a call (or email) away: 877.434.2894 or support@braintreepayments.com.
> I don't know if there are other investors than Y Combinator though, there might be one that will push for a sale.
We do have other investors, but (luckily) they're as uninterested in selling as we are. We've always been clear with them that we want to build this for the long-term.
I was linking the article not for showing that they're selling but because it's the first (most recent?) article I found in 2 minutes on Google stating their valuation (one article from 2012 talks about 1bln valuation, btw we're in the same league of Braintree)
If you do at least $3-5k/month in transactions, a real merchant account from a bank/ISO/MSP. I pay $0.05 + 0.04% markup over interchange. Even after the monthly and gateway (Authorize.net) fees, that's around 2%, compared to Stripe's 2.9% or PayPal's 2.2% (I qualify for their merchant rate discount). Amex cards are the only ones I pay more for by not doing a flat rate.
[By coding against Spreedly, it's possible to do things like send all Visa and MasterCard charges to Authorize.net, and all Amex charges to PayPal for the flat rate, without ever seeing the cardholder data myself. I don't though.]
I'm more interested in micropayments but this interchange stuff seems a bit complicated. How would a $2 payment work out with interchange included ? I mean, what fees would apply for a $2 credit card payment ?
So you'd have to pay interchange, plus whatever your processor charges on top of that, which will depend on them, and volume. You can definitely shop around a little bit, there's probably several local people who can talk you through it and bring you some offers to the table from various processors, but also get a quote from people like TSYS, First Data, and Chase Paymentech directly.
I'm remembering fees varying from $.05 to $0.10 and 0.10% to 0.15% on top of interchange. The visa interchange rates are available at (1) to give you an idea. You're mostly interested in the eCommerce categories probably, so you'll be paying 1.80 to 1.95% plus $0.10 on top of whatever you're paying from you're processor for credit cards, debit cards are cheaper.
Many people that do micropayments will try to combine some transactions together, in order to save money. That said, you might be interested in paypal micropayments (2), as they only charge $0.05 + 5%, which for a $2 transaction, is a big savings.
Thanks for the detailed information. That certainly clears things up a bit.
I've been using Paypal micropayments for the past year or so and it's been the best bet for $2 transactions (I pay 6%+$0.05 for cross border payments). Ends up being $0.17 per transaction. I haven't come across anything that beats that by a large enough margin so as to replace Paypal yet.
The only downside is that Paypal is applying the standard 6% fee to $20 transactions as well (as opposed to the lower 2.9% fee), so I either need to route these transactions to a non-micropayments Paypal account or do something else with them... this is what I am currently working on solving. The difference doesn't come out to be much for a $20 transaction but with higher transaction volume it will certainly stick out as a sore point.
If you want customers to be able to pay with a credit card, it will be difficult to get individual charge fees under $0.30. If you expect repeat purchasing, best to aggregate charges either ahead of time (aka "pre-pay") or post.
Apple aggregates to a great extent but I think could go much further. It only bundles up purchases over several days or perhaps a week. Since it's minimum fee is $0.30 (30% of $0.99) it just about breaks even on single song purchases.
But Apple would be fine with the whole App/iTunes Store being a break-even proposition since it has consistently stated that its interest is in the hardware sales.
Don't discount everything Paypal does to buffer you as a merchant from the effects of fraud. I think some people look at raw transaction fees and don't realize how much extra shit they will have to deal with if they're going to process credit cards directly. There is definitely value added by Paypal in this area, and I think it's easily worth more than saving 0.2% on $3-5k in payments per month.
We've encountered a lot of customers that are paying much more than they should be for a merchant account and gateway setup. Stripe's fees start at 2.9% + $0.30 per transaction, we don't have any hidden fees, and we offer volume discounts for businesses on track to do $1MM/year or more. Separately, PayPal has many add-on fees ($30 per month if you want to design and host your own checkout pages, 1% cross-border surcharge, 3.5% transaction fee when your customers pay with American Express, etc.) which often make it more expensive than Stripe.
I've been a Braintree customer for several years and have been really happy with the service and support, but if I were in your shoes I'd probably take a hard look at Stripe.
While I like to see more competition in the marketplace, I think this is a smart move for Paypal and also a big milestone for a Chicago startup exit. Congratulations are in order to the Braintree team.
Time to look for a new payment provider. Braintree stood out with their amazing service and support. Paypal stand out for their complete lack of competent service and support.
Paypal will kill it, PAYPAL are the absolute worst company in the world and terrible to for any new businesses who endup having their money "held" for ridiculous amounts of time, and no customer support.
1) Braintree is a dog fart compared to paypal. They certainly weren't bought for the user base. (although, their size probably probably affected the choice between stripe and bt)
2) David Marcus was acquihired from a team of 5 (a 'real startup') and has been working to startupify paypal. [1] Perhaps he thinks Braintree could be an example to the rest of the company.
3) Venmo is the most successful peer to peer mobile payments app. Peer to peer mobile payments will transition into wallet, and then banking. It's an important position to own.
4) Paypal's customer base is 'aging' like yahoo's has been. Braintree has a younger, hipper market segment (than paypal).
5) Stripe is cooler than braintree, but another order of magnitude smaller, plus they don't have the white-glove support of Braintree. From what I've heard, DM is continuously frustrated by Paypal's support. I believe BT's support is seen as a learning opportunity for PayPal. Also, Braintree was able to successfully copy all Stripe's innovations. Braintree has large, mature intl. presence, too.
Not an expert but thats my attempt to be 'objective'
Venmo is also used by Simple[1] [2] so it's already in banking. That may have influenced things. If Simple get big then Paypal could end up processing a significant amount of banking transactions.
Although I am sticking with Stripe, I hope that they leverage features like Venmo with PayPal's (rather large) user base - mobile payments are terrible as it stands.
It'll be interesting to see if large partners (GitHub, AirBnB, etc) stay onboard through the transition or if they are coerced by competitors.
I'm always amused when I read the statements from newly acquired companies. They refuse to call it what it is, a purchase, and instead frame it as an alignment, a partnership, anything that allows them to distract from the fact that they are no longer autonomous.
Yeah, but Braintree's CEO is reporting into David Marcus, and all of the quotes from the eBay side are talking about PayPal. For all intents and purposes, Braintree has been acquired by PayPal.
Boy, everyone is so negative about the purchase on here! Braintree's customer base is far too large at this point for PayPal to just shut it down; that would be terrible PR because Braintree is critical to many businesses at this point. It's also not that easy to just go rip out one processor for another on a huge legacy code base.
PayPal would be making things worse for themselves if they did that and this purchase, is IMHO, an attempt to make things better for them and to bring them into the modern software world. I'm sure they also acquired Braintree for their engineers!
I don't know about the future of Braintree but I know that this acquisition is bad for the e-commerce market. It's an irony that companies challenging the status quo end being part of it.
This year Paypal expects to process on mobile twice as much as Braintree is processing as a whole.
The margins in this business are very small, .9% transaction fees on 11b are not that huge.
Where Braintree misses the opportunity is gathering better for young startups that are in the early growth phase. 100 EUR monthly minimum on .10c/trx fees is not easy to digest in the beginning.
"Interchange +.9% + €.10 per transaction. €100 per month minimum • Everything included • No additional fees". This is probably shown only to EU visitors.
I also confirmed this with braintreepayments support and their reply was: "The €100 is a monthly minimum based on a per transaction fee of €0.10. For example, if your first month of transaction charges are €68, you would need to pay an additional €32 to 'top up' the amount. Interchange + 0.90% is not part of the calculation. Only the per transaction fee of €0.10 is used to calculate the €100 monthly minimum."
When I switch the site to "United States" it reads:
"2.9% + $.30 per transaction. No additional fees • No minimums • Everything included"
Extremely annoyed by seeing this minimum applied only to the EU countries!
> Extremely annoyed by seeing this minimum applied only to the EU countries!
I would take a 100€ minimum over a 320% increase in transaction fees (2.9% vs. 0.9%) and a 130% increase in fixed per-transaction fees (0.10€ vs. $0.30 at current exchange rate) any day of the week.
Unfortunately it's interchange + 0.9%, not just 0.9%. Interchange ranges ~1.2-2% so the difference gets much smaller.
With a 100€ minimum the 10c transaction fee becomes 10c only after the first 1000 transactions (1000*0.1=100). If ignoring the variable part of the fee (%) then the break-even for this 10c vs 30c transaction comparison is at ~333 transactions. For a new company it takes a long time to get the first 333 monthly paying customers.
FYI: Of the total Paypal is processing i.e. ~145B/year only half is Paypal branded i.e. appx $70-80B/year, the rest of it goes through Verisign gateway
Yes, and PayPal definitely has a history of not upsetting its customers, avoiding negative PR, and not making things worse for themselves. We can certainly bet on them to handle this acquisition in a reasonable way.
Show me a company working as a purely Internet bank of sorts and I'll show you a company with pissed off customers. Truth is, this business is very hard. For every time Paypal misidentifies a target and blocks their payments, they correctly identify scammers many more times. We tend to think "is it that hard to tell a scammer from blah legit site?". The answer is yes because guess what scammers are thinking everyday when they wake up? They are thinking 'how can we look more like a legit business so our payments go through'.
I say this as someone whose had to go through paypal's painful process several times in over a decade of use.
Ally Bank also makes your account next to useless until you go through a very tedious verification process from the get go. In my case, they mailed me some documents that unsurprisingly I never ended up bothering with.
On the other hand you can sign up and begin using paypal in minutes.
If you're suggesting that Ally is an alternative to PP, that's nuts. I can see why businesses might be attracted to Ally over PP because of better customer service, but better customer service won't matter if you're not getting the volume of business that may be driven by PayPal.
Ally Bank is doing quite well because it managed to ditch the millions of pissed off customers it had when it was General Motors credit department. Give them time and I'm sure you will manage to piss everyone off again, despite their shiny rebranding.
I don't think the problem with Paypal are the payment blocks with no notification, the problem is their complete and utter refusal to talk to the customer about it.
They have anti-fraud systems. Fine. Fucking let me talk to someone who can put their fingers on the keyboard and get it sorted out without a front page article on Hacker News, Reddit, and The Consumerist to shame them into action.
Exactly. This is exactly what Braintree was positioning itself against, offering a 'human touch' to every interaction and having a real person to review the details if you need to scale your business et al.
We can only hope PayPal learns something from Braintree & hopefully change them for better or they may end up like PayPal. Only time will tell.
As a business they have done great. So, Congratulations to the entire team at Braintree.
Mm, I don't put much stock in that. Basically, talk is cheap. Marcus posted a lot of flowery language and PayPal's activity does not appear to have meaningfully changed.
The MailPile thing happened at the beginning of this month - the fact that this can happen at all, and, as usual, nothing was fixed until that bad press started to roll in, points to a systemic problem and culture at Paypal that just changing a CEO isn't going to fix in a reasonable amount of time.
I can tell you from personal experience and experience of 25-30 others here.. Its a smoke screen. The last few people who tried to do what David says to media have either been canned or now serving in timeout zone. Again the President means well but culture internally is much worse. Its a company filled with people whose skills are way past their prime trying to hold on to what little mileage left. David wants things to change but the middle layer won't. More often than not they are the ones who make calls on day to day operations. Many senior execs who tried to get shit done were moved out by these politicians. Even today diplomacy/politicking is valued in the company over talent or Data or logic/reasoning.
as far as topic at hand is concerned, MR from Braintree will be working closely with DM and directly. So expect only good things. Buying Braintree is a business play. (Just check out their numbers and clientele). PayPal can try to get clients like AirBnB or Uber but those startups would try every other bush before PayPal.
Hope this helps
P.S: I work for PayPal and probably one of the strong proponents of it. The above opinions are purely mine. and No i have not been canned or put in a timeout box.. yet!
I've seen similar anecdotes before, but what I don't understand is why obstructive middle management haven't been shown the door. If it really is a mid-level problem how can the politicians manage to hold off executive management? And if they really are the problem, and both the front-line guys and executive level are willing to change, what reason is there to keep the naysayers around instead of firing and then promoting from within?
No doubt there have been horror stories coming from PayPal and I wouldn't use them as a payment platform. You also have to realize though that people of all demographics use PayPal and their fraud detection/handling reflects that, I think.
People use PayPal for receiving small illicit drug shipment payments to paying their contractors to recurring payments for their service.
You cannot expect to have a great time on a service that is catering to everyone because the lowest common denominator will always ensure the organization has to be on-top of fraud and illicit activity.
I've been waiting for PayPal to do something to show that they are thinking about their long-term health and position in the market and this acquisition is exactly that. It will be interesting to see how competitors (like Stripe and Balanced) end up for this too!
But only after the requisite outrage fest on here and other sites. The fact that it takes a front page article on a site read by a lot of industry people to get them to do the right thing is... disheartening, to say the least.
I definitely agree. Contrary to the negative perceptions, there is a major opportunity to market the BrainTree service to eBay's small to mid-size merchants along with other services as part of a professional ecommerce store-in-a-box approach. eBay can bundle every aspect of the sales funnel from customer acquisition through actual credit card purchase. BrainTree could also be used as a replacement for PayPal Payments Pro.
Using more than one payment processor is definitely a smart move. Not only to avoid unpredictable consequences such as this acquisition, but also because it will give you a negotiating advantage as payment processing becomes more and more of a commodity.
From an engineering perspective at my last job, having multiple also allowed us to abstract away the processors themselves into ways that made adding a new one pretty painless. If one went down, we just failover seamlessly.
The key to note about Verisign purchase is that of the appx. 1/2 of $145B/year volume that paypal processes is through the verisign gateway which is not paypal branded. Verisign payments are about half of total so it was a good acquisition
I agree that it is still too early to tell if something good will come out of this or not. I am especially curious if Braintree customers will get access to PayPals superior transaction risk assessment technology. That might be huge for people that use Braintree for marketplaces.
It's disappointing, because among that market segment, Braintree is the only one that offers phone support, and for that, I fancy them over Stripe, Balanced, and others.
That said, maybe now with Paypal support, they will reverse their stance on crowdfunding. If not, I'm desperate for a professional payment processor that doesn't ask me to send an email if I have an issue.
Actually that's one of the things that annoyed me. For quite a while when you try to login at braintreegateway and you clicked Forgot Password it asked you to call them. There are somethings phone calls are good for and I don't think resetting a password is one of them. Maybe they had a good reason for that.
And why the hell doesn't "braintreegateway.com" redirect to the right place?
You can expect the same solid customer support from Braintree as always, delivered by the same support, accounts, and risk teams. You can also expect even more innovative technology and products to come during this new chapter for Braintree. If you have specific questions about your account, you can always talk to a real person at 877.434.2894 or support@braintreepayments.com.
Hey Nathan, many of our customers at Balanced (those that want it) get a designated account manager whom they can call if any of our standard support channels fail them. If that doesn't work feel free to give my cell a ring: (Tucson, AZ area code)-869-1947
186 comments
[ 5.3 ms ] story [ 230 ms ] threadTo the limited extent that having rough numbers helps improve your estimation of what the payoff matrix is if you build a business to where it is worth $800 million: typically, the founders would split several hundred million, most employees would get $X0,000 to $Y00,000, and exceptionally early employees plus key executives (CEO, etc) walk away with a few million. The remainder (several hundred million) goes to the investors.
Braintree's numbers might be different due to their bootstrapped pre-funding trajectory or due to choices made by the founders, but ultimately their numbers are their numbers.
As it's been said by others here, this is certainly good for Stripe because more than a few Braintree customers will flock their way to avoid PayPal, but it also creates opportunities for other upstarts in this arena.
That being said, there is a certain amount of lock-in for these products, so while it's relatively easy for a business to transition their new users/payers from Braintree to Stripe/others, it's pretty painful to transition existing users/payers out of Braintree as all existing users would need to re-key their CC numbers and billing addresses.
[1]: https://www.braintreepayments.com/blog/open-letter-to-the-ce...
[1] http://www.portabilitystandard.org/ (FAQ Q #1)
Looks like (unconfirmed list): fusebill, atpay, braintree, recurly, chargebee, app55, uberglobal
1: https://spreedly.com/
Payment processors are in the risk business -- becoming a risky account to underwrite, or their making a mistake in evaluating the risk, means you lose your account, any money that hasn't yet made it to your bank, and any customer info you have stored. Because the processor bears all the risk for chargebacks and bankruptcies of its merchants, it's an extremely thin margin business.
Spreedly is in the secure API business. They don't care much about the health of your business, the risk associated with your transactions, or anything else the processors care about. They just have to pass around messages and get paid a fee every time they do. It's a fat margin business.
The risk of losing a Spreedly account is much lower than losing a payment account. The risk of Spreedly suddenly going out of business is much lower than the risk of a small merchant account provider/reseller going out of business. And if you choose to stop relying on Spreedly, they'll hand you all your customer data (securely) to take elsewhere, which most gateways with card vaulting refuse to do. It's not a choice of who to commit to, it's freedom from vendor lock-in.
[1] https://core.spreedly.com/manual/payment-gateways/balanced
[2] http://blog.balancedpayments.com/announcing-balanced-payouts...
If you still think I'm wrong, please be constructive about it.
[1] http://www.independent.ie/irish-news/brothers-vow-not-to-sel...
Survival of the richest not the one with better service.
I don't know if there are other investors than Y Combinator though, there might be one that will push for a sale.
We do have other investors, but (luckily) they're as uninterested in selling as we are. We've always been clear with them that we want to build this for the long-term.
-edit- This seems like a good list: http://gatewayindex.spreedly.com
[By coding against Spreedly, it's possible to do things like send all Visa and MasterCard charges to Authorize.net, and all Amex charges to PayPal for the flat rate, without ever seeing the cardholder data myself. I don't though.]
I'm remembering fees varying from $.05 to $0.10 and 0.10% to 0.15% on top of interchange. The visa interchange rates are available at (1) to give you an idea. You're mostly interested in the eCommerce categories probably, so you'll be paying 1.80 to 1.95% plus $0.10 on top of whatever you're paying from you're processor for credit cards, debit cards are cheaper.
Many people that do micropayments will try to combine some transactions together, in order to save money. That said, you might be interested in paypal micropayments (2), as they only charge $0.05 + 5%, which for a $2 transaction, is a big savings.
1: http://usa.visa.com/download/merchants/visa-usa-interchange-...
2: https://www.paypalobjects.com/IntegrationCenter/ic_micropaym...
I've been using Paypal micropayments for the past year or so and it's been the best bet for $2 transactions (I pay 6%+$0.05 for cross border payments). Ends up being $0.17 per transaction. I haven't come across anything that beats that by a large enough margin so as to replace Paypal yet.
The only downside is that Paypal is applying the standard 6% fee to $20 transactions as well (as opposed to the lower 2.9% fee), so I either need to route these transactions to a non-micropayments Paypal account or do something else with them... this is what I am currently working on solving. The difference doesn't come out to be much for a $20 transaction but with higher transaction volume it will certainly stick out as a sore point.
- charging a 30% processing fee
- taking a loss on small payments
- bundling charges whenever possible
- encouraging people to buy itunes gift cards
- being big enough to negotiate better rates than normal people can.
But Apple would be fine with the whole App/iTunes Store being a break-even proposition since it has consistently stated that its interest is in the hardware sales.
We've encountered a lot of customers that are paying much more than they should be for a merchant account and gateway setup. Stripe's fees start at 2.9% + $0.30 per transaction, we don't have any hidden fees, and we offer volume discounts for businesses on track to do $1MM/year or more. Separately, PayPal has many add-on fees ($30 per month if you want to design and host your own checkout pages, 1% cross-border surcharge, 3.5% transaction fee when your customers pay with American Express, etc.) which often make it more expensive than Stripe.
1) Braintree is a dog fart compared to paypal. They certainly weren't bought for the user base. (although, their size probably probably affected the choice between stripe and bt)
2) David Marcus was acquihired from a team of 5 (a 'real startup') and has been working to startupify paypal. [1] Perhaps he thinks Braintree could be an example to the rest of the company.
3) Venmo is the most successful peer to peer mobile payments app. Peer to peer mobile payments will transition into wallet, and then banking. It's an important position to own.
4) Paypal's customer base is 'aging' like yahoo's has been. Braintree has a younger, hipper market segment (than paypal).
5) Stripe is cooler than braintree, but another order of magnitude smaller, plus they don't have the white-glove support of Braintree. From what I've heard, DM is continuously frustrated by Paypal's support. I believe BT's support is seen as a learning opportunity for PayPal. Also, Braintree was able to successfully copy all Stripe's innovations. Braintree has large, mature intl. presence, too.
Not an expert but thats my attempt to be 'objective'
[1]http://pandodaily.com/2013/08/12/if-its-not-broke-break-it-h...
[1] https://simple.com/ [2] http://pandodaily.com/2013/09/20/mobile-payments-are-one-thi...
It'll be interesting to see if large partners (GitHub, AirBnB, etc) stay onboard through the transition or if they are coerced by competitors.
It's how you say it not what it is although by my book it's still the same damn thing.
1. The transaction is planned between eBay and Braintree.
2. At this point eBay has plans to acquire Braintree (agreed to acquire).
PayPal would be making things worse for themselves if they did that and this purchase, is IMHO, an attempt to make things better for them and to bring them into the modern software world. I'm sure they also acquired Braintree for their engineers!
This year Paypal expects to process on mobile twice as much as Braintree is processing as a whole.
The margins in this business are very small, .9% transaction fees on 11b are not that huge.
Where Braintree misses the opportunity is gathering better for young startups that are in the early growth phase. 100 EUR monthly minimum on .10c/trx fees is not easy to digest in the beginning.
"Interchange +.9% + €.10 per transaction. €100 per month minimum • Everything included • No additional fees". This is probably shown only to EU visitors.
I also confirmed this with braintreepayments support and their reply was: "The €100 is a monthly minimum based on a per transaction fee of €0.10. For example, if your first month of transaction charges are €68, you would need to pay an additional €32 to 'top up' the amount. Interchange + 0.90% is not part of the calculation. Only the per transaction fee of €0.10 is used to calculate the €100 monthly minimum."
When I switch the site to "United States" it reads: "2.9% + $.30 per transaction. No additional fees • No minimums • Everything included"
Extremely annoyed by seeing this minimum applied only to the EU countries!
I would take a 100€ minimum over a 320% increase in transaction fees (2.9% vs. 0.9%) and a 130% increase in fixed per-transaction fees (0.10€ vs. $0.30 at current exchange rate) any day of the week.
With a 100€ minimum the 10c transaction fee becomes 10c only after the first 1000 transactions (1000*0.1=100). If ignoring the variable part of the fee (%) then the break-even for this 10c vs 30c transaction comparison is at ~333 transactions. For a new company it takes a long time to get the first 333 monthly paying customers.
I say this as someone whose had to go through paypal's painful process several times in over a decade of use.
On the other hand you can sign up and begin using paypal in minutes.
Yes indeedy by deferring the "very tedious verification" process until it massively impacts your business and PP has you by the balls.
They have anti-fraud systems. Fine. Fucking let me talk to someone who can put their fingers on the keyboard and get it sorted out without a front page article on Hacker News, Reddit, and The Consumerist to shame them into action.
We can only hope PayPal learns something from Braintree & hopefully change them for better or they may end up like PayPal. Only time will tell.
As a business they have done great. So, Congratulations to the entire team at Braintree.
The MailPile thing happened at the beginning of this month - the fact that this can happen at all, and, as usual, nothing was fixed until that bad press started to roll in, points to a systemic problem and culture at Paypal that just changing a CEO isn't going to fix in a reasonable amount of time.
as far as topic at hand is concerned, MR from Braintree will be working closely with DM and directly. So expect only good things. Buying Braintree is a business play. (Just check out their numbers and clientele). PayPal can try to get clients like AirBnB or Uber but those startups would try every other bush before PayPal.
Hope this helps
P.S: I work for PayPal and probably one of the strong proponents of it. The above opinions are purely mine. and No i have not been canned or put in a timeout box.. yet!
People use PayPal for receiving small illicit drug shipment payments to paying their contractors to recurring payments for their service.
You cannot expect to have a great time on a service that is catering to everyone because the lowest common denominator will always ensure the organization has to be on-top of fraud and illicit activity.
I've been waiting for PayPal to do something to show that they are thinking about their long-term health and position in the market and this acquisition is exactly that. It will be interesting to see how competitors (like Stripe and Balanced) end up for this too!
They unfroze Mailpile's funds recently. That's a sign of good things.
I've see many companies get burned by only having one. It takes ages to get another processor up and running.
I also doubt they'll shut down Braintree or roll it into the main product.
That said, maybe now with Paypal support, they will reverse their stance on crowdfunding. If not, I'm desperate for a professional payment processor that doesn't ask me to send an email if I have an issue.
And why the hell doesn't "braintreegateway.com" redirect to the right place?
You can expect the same solid customer support from Braintree as always, delivered by the same support, accounts, and risk teams. You can also expect even more innovative technology and products to come during this new chapter for Braintree. If you have specific questions about your account, you can always talk to a real person at 877.434.2894 or support@braintreepayments.com.