
Tell HN: Braintree is no longer startup-friendly - jjeaff
About 3 years ago, after researching payment processing options, we chose Braintree. The thing is, they were still riding on the goodwill they had built up thus far pre-paypal purchase.<p>Paypal is a total nightmare for some people (especially if you plan on growing fast), so the fact that they were recently purchased by them, should have been a red flag, but customers and reviews still seemed positive.<p>One of the selling points with Braintree was always that once you are underwritten, they are going to work and grow with you. Unlike Paypal, who will arbitrarily freeze your funds at the most inopportune moment.<p>Apparently, Paypal has now applied this same policy at Braintree. One of the features we offer our customers is allowing them to sell event tickets through our software. They can use their own merchant account, but we encourage them to use our in house system (braintree marketplace) because it is usually faster and easier.<p>And so it worked fine for 3 years, slowly growing, processing more and more payments through more and more sub-merchants. Hundreds of thousands of dollars. Then they just decided to shut down 2 of our newest customers and hold 100% of their funds ransom for 180 days. More than $50k for a single customer which is a terrible burden. Reasons given was that we had a sudden increase in marketplace sales from this new customer and they don&#x27;t want the exposure (even though we processed even more than this from a single sub-merchant last year in a short period of time).<p>So just wanted to put it out there that Braintree is now up to the old tricks of Paypal. Lull you in to a false sense of security, then lock up your funds suddenly for whatever reason with no recourse.<p>If you currently use Braintree, be careful, even with a good growth history on file with them, they are no longer startup friendly as they can&#x27;t seem to handle spikes in activity or at least have no desire to do so.
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dangrossman
Braintree was acquired years before you started using them, so the PayPal-
interference angle doesn't really play. The only thing surprising is that
you're in the business of facilitating event ticket sales and weren't
expecting and prepared for this. Pre-selling anything is very high risk for
the underwriting bank, especially events: if the event is poorly planned or
doesn't get put on, and the organizers have spent the money or disappeared,
they can end up on the hook for hundreds to thousands of chargebacks. One
failed event can take down a small payment processor, as their chargeback
ratio will be decimated. It's pretty much guaranteed to take _you_ out if
you're letting them sell through you. The fact that you had other customers
with events that went successfully in the past doesn't reduce the risk for the
next guy's event. This situation was inevitable, and that will be the case no
matter what processor you work with, as they're virtually all underwritten by
the same dozen or fewer banks in the end... often the same two banks that
underwrite PayPal's card processing. My advice: unless you can get to
Eventbrite scale, vet event organizers well, and limit the size of events you
sell tickets for, don't be an intermediary for event ticket sales. Make them
bring their own payment accounts for any event where 100% of sales getting
charged back would be more than 1% of your monthly volume.

~~~
jjeaff
It takes time for an acquiring company to sink its talons in. Braintree
assured us upon signing up that they were completely independent and would
continue to operate the same as always. It was naive to believe that of
course.

We had 3 years of processing events in our very niche space where each of our
organizers that sell tickets are licensed, bonded, and fingerprinted,
registered with the SEC and have an active profile on FINRA (because they are
licensed to sell securities) that shows so much as a credit card default when
it come to financial impropriety.

The real problem with Braintree is that they were not open and upfront about
their policies and even misleading at times. If certain levels of ticket sales
would be too risky for them, then they should have told us those limits up
front, rather than waiting until sales were high and then freezing the account
and holding the money.

As for your advice, I agree, that is our plan moving forward. We will only
process small events in house and require people to get their own account
otherwise.

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segmondy
As someone in the payments industry, event tickets are very risky. You can
sell event tickets, get paid. The events is far out in the future and all is
well, then on the day of event you're a no show and the chargebacks starts
rolling in. If you can't pay it, then the processor eats it.

~~~
tinus_hn
Can’t you use a payment system that doesn’t allow chargebacks?

~~~
tehwebguy
Not if you want people to attend. Cash, wire transfer, money order & crypto
aren’t how people buy tickets ahead of an event.

~~~
GFischer
In the U.S., you mean. I've seen plenty of events (usually professional
conferences) that have to be paid in cash or wire transfer here in South
America.

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bleakgadfly
> Then they just decided to shut down 2 of our newest customers and hold 100%
> of their funds ransom for 180 days

So Braintree supports payments through a number of providers, credit cards and
PayPal, Apple Pay, etc. When you say they hold 100% of their funds, is this
for PayPal payments via Braintree, or is it also credit card payments (i.e.
payments directly to Braintree)? In other words, are the 100% fund you mention
stored at PayPal?

The reason I'm asking is because Braintree does credit card disbursement a
couple of days (or something like that) after a credit card payment has been
performed. So if they shut a customer down, wouldn't they "only" hold the
money from the first transaction after the last payout, till the shutdown
occured? In other words, if the last payout from Braintree happened on Monday,
and there was another transaction on Tuesday due to be paid out to the
merchant by Braintree on Thursday, and Braintree shut them down on Wednesday,
this would mean the "100% funds" mentioned is the transactions happening on
from Tuesday till Wednesday, since they were shutdown on Wednesday?

I hope the question make sense! Just trying to make sense of this :-) (using
Braintree as well, but not Marketplace)

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uberman
After reading the horror stories related to Paypal, I personally do understand
why anyone would use them other than for VERY casual/inconsequential
transactions. Sorry to see this spread, but it seems reasonable to assume it
would following the purchase.

~~~
mariushn
What are the alternatives, besides asking for a credit card # via Stripe? From
customers point of view, it's simply easier & safer to pay with PayPal.

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DesHacker
PayPal is horrible. They acquired Braintree and now Braintree has become
horrible. They are now acting like established banks, and that is why startups
like Stripe kicked them in the proverbial behind. PayPal nor Braintree is is
startup friendly. Stay away from both.

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muzani
I've always been really wary of PayPal because of all the stories like this.
Freezing 100% of funds is a really scary thing.

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nik736
I am using Braintree for years and never had any issues, Support is really
great as well.

