
PayPal nears deal for Braintree Payments - minouye
http://blogs.wsj.com/digits/2013/09/22/paypal-nears-deal-for-braintree-payments/
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bready
I'm CEO at Braintree. I'm not going to comment on any of the rumors that are
being circulated. I will tell you that we won't do anything that would
compromise our product or our service. We are all fully committed to that.
More on that here --> [https://www.braintreepayments.com/blog/more-committed-
than-e...](https://www.braintreepayments.com/blog/more-committed-than-ever)

~~~
thaumaturgy
> I will tell you that we won't do anything that would compromise our product
> or our service.

Wouldn't be the first time someone said that prior to being acquired, only to
realize later that they do not have the influence over upstream decisions that
they imagined they would.

~~~
bready
I'm no babe in the woods. I've been through multiple acquisitions in the past
as well as multiple funding rounds. With either you run risk of meaningful
changes for employees and customers if you don't choose well and structure
properly. Lots of founders and CEOs take the cop-out of "I didn't know." You
won't find any of that here.

When I give my commitment and my word that we won't do anything that would
compromise our product or our service, I do so with eyes wide open. Again, I'm
not making any statement about the rumors that others are fueling. However, I
do want to be very clear about our principles and the fact that everything we
do will be driven by our commitment to deliver great products and fantastic
service to our customers. That means I’d have to be very confident in our
ability to do that for any path we choose – with no cop-out of “I didn’t
know”. There will be no deviation from that – you have my full commitment on
that.

~~~
the_watcher
I am an extremely loyal Venmo user (I generally make people sign up if they
want fast payment from me, and don't feel bad since everyone I have onboarded
has become a loyal user). Thanks for coming in here and talking about this,
since I'm not a huge PayPal fan and definitely worried that this type of move
could break what I love about Venmo (if it happens). Keep up the good work on
Venmo, it's really been a huge improvement in my life, from buying movie
tickets, to splitting checks, to letting me use my rewards card to make big
purchases for a group and instantly get paid back since the mobile
implementation is so good.

While you are here, one interesting positive I could see from joining up with
PayPal is letting people use Braintree without a merchant ID (the main
drawback of Braintree, I run a Shopify store for someone and can't get
Chargify set up on Braintree because of this).

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marcamillion
I would love to hear DHH's thoughts on this because:

a) He recommended Braintree from Day 1 as an interesting payments company.

b) He liked that they were Bootstrapped.

c) They took a lot of funding and that seems to have gone sour.

d) They are being acquired - in what looks like a desperation sale.

e) They are being acquired by Paypal - which I am sure I have heard him hate
on.

If he will talk publicly about this...that would be quite interesting.

I imagine now, he may consider moving all his payments to Stripe.

~~~
rexreed
Interesting - can you provide sources for b, c, d? In particular, isn't b) and
c) contradictory? Just want to read more on this - not trying to be
adversarial.

~~~
chinmoy
BrainTree has been bootstrapped since it's beginning until October, 2012 when
they raised $35 million. And the guys at 37 Signals sure love BrainTree since,
that is what they use to process payments for 37 Signals. Also, BrainTree was
featured in their famous 'Bootstrapped, Profitable and Proud' series
[http://37signals.com/svn/posts/2800-bootstrapped-
profitable-...](http://37signals.com/svn/posts/2800-bootstrapped-profitable-
proud-braintree)

~~~
marcamillion
Thanks for providing that link...that's what I was remembering, but couldn't
find it.

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t0
But wont most of Braintree's customers jump ship rather than deal with Paypal?
They're effectively killing it by buying it.

~~~
pbreit
No. That line of thinking is incredibly tired.

~~~
bengotow
I think he's got a point - users won't jump ship because Braintree (and Venmo)
are now PayPal products, they'll jump ship because PayPal ruins them with
fees, long payout times, etc...

~~~
kintamanimatt
If I were a Braintree customer I'd jump ship now before things get bad. Why
wait? PayPal have a long history and are a known entity. There's no reason
they wouldn't turn Braintree into something that feels like a PayPal company
shortly after the celebrations are over and the ink is dry.

If you're a Braintree customer, jump ship while times are good before the
storm arrives.

~~~
the_watcher
Stripe is about as good as Braintree in my experience (at least in terms of
online payments processing and powering a shopping cart), and has fantastic
customer service. But if Braintree is working, why switch now? Stripe is
really easy to integrate if you have to later.

Braintree kills its competitors in P2P payments though. Venmo has been a huge
improvement in my life.

~~~
kintamanimatt
Why wait until things get bad? That's like being in an area where there's a
real tsunami warning and saying "hey, it's calm now ... I'll just wait until
the waves get here before I leave!" The waves will come and you'll be caught
off guard.

If PayPal buys Braintree it's likely the PayPal culture will rub off and
they'll stop being the great company they are now. This is the reason I'd dig
my well before I'm thirsty and switch to a company that doesn't appear headed
for a beheading by PayPal.

~~~
the_watcher
That's not a good analogy. Switching from PayPal to Stripe is currently very
easy (I did it a few weeks ago). Nothing like fleeing an area with a tsunami
warning. When switching costs are that low, why not stick with something that
is working?

~~~
kintamanimatt
Because what happens when your Braintree account gets arbitrarily frozen under
PayPal's risk management policies? It might be working today, but that doesn't
mean the rug won't be pulled from out underneath you, and at that stage there
will be real consequences for your business, i.e. frozen funds and drama. Then
you've got to do the whole migration while putting out a fire.

If you wouldn't want to do business with PayPal, you probably wouldn't want to
do business with Braintree if it's owned by PayPal. A different brand doesn't
mean that they're not being operated by the same masters.

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ciokan
Too bad. I had nightmares with Paypal and always considered Braintree as a
viable alternative. I'll be switching off soon.

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andrewhillman
One day a payment company will refuse to be acquired and give paypal a run for
their money. Paypal fees are just too expensive and I have to believe there's
a company who will want to disrupt and take on Paypal rather than succumb to
them.

~~~
bigiain
It might be that this is indicative of the core value of Paypal's fraud
prevention intelligence. All the smart people I know who work at Paypal are
working on fraud prevention (even the analytics guy I know there admits to
providing more data to the fraud prevention teams than anybody else).

I wouldn't be very surprised if Braintree decided to be acquired because they
learned that doing "enough" fraud protection requires the sort of fees that
Paypal charges – _plus_ a dataset like eBay to mine for patterns and to
instrument up for real-time triggers.

Thinking about it (as in, this is not some long-held considered belief, just
some random thought that's just popped into my head), it'll kinda surprise me
if anyone smaller than Paypal/eBay, Amazon, Facebook, or Google, will be able
to compete longterm as a payment company. If you don't have firehose-sized
transaction data to monitor (Paypal/Amazon) or strong social network signals
about identities (Facebook/Google), I doubt you're going to be able to create
fraud protection as effectively as those players, and that's going to cost you
and your (non-fraudulent) customers and be reflected in the transaction fees
you'll end up non-competitively charging.

Random thought number 2 – I wonder if there's now some opportunity to start up
a non-US based payment company, and lobby for privacy law changes in the wake
of the post-Snowden knowledge about how the PRISM-linked companies are mis-
using personal data, especially of "non US persons"? I wonder how hard you'd
have to push the Brazilian government to make using PRISM-linked or US based
companies as payment services illegal - for domestic privacy reasons?
(Unfortunately, I suspect the opportunities for me in Australia to lobby for
laws protecting Australian citizens from surveillance by the NSA won't get any
support at all from our in-bed-with-and-beholden-to-the-US government.)

~~~
ximeng
There could be ways round the big-data-required problem. You could charge
different transaction fees depending on how good your data is on somebody and
allow them to provide data to improve your confidence in them. Or require
deposits from people and return them over time.

~~~
bigiain
That's a good idea - but I suspect it'd be a much harder sell to end user
merchants (and their web developers).

Explaining "our fees are based on your customers fraud risk, only 0.9% + 25c
per transaction for people who've liked your facebook page and have more than
100 facebook friends and an account more than 24 months old, up to 5% + $1 per
transaction for people using TOR or coming from ex-Russian-state ip addresses"
isn't going to go down so well as "Paypal costs 2.9% + 30c/transaction and
works globally in any currency, you can probably get half that rate from you
own bank if they'll give you an internet merchant number - but they'll
probably only give you local currency transactions."

~~~
ximeng
Agreed. It might be easier to charge the customer rather than the merchant. If
as customer I could choose from a list of payment providers and get a
different fee from each one then the competition would be very transparent.
Plenty of barriers to overcome to get to that point though.

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1123581321
Congratulations to the shares and options holders, but that is too bad. My
first introduction to Braintree was this Profitable & Proud article from
37signals[1]. Braintree's principles of providing exceptional service both to
business people and developers, their work to improve the overall industry,
and their concern for the people employed by them will probably not survive
being merged into PayPal.

1 [http://37signals.com/svn/posts/2800-bootstrapped-
profitable-...](http://37signals.com/svn/posts/2800-bootstrapped-profitable-
proud-braintree#all_comments)

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jbrooksuk
I'm so glad I didn't use Braintree now. Thank you Stripe for opening the UK
Beta at just the right time back when.

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AdamN
I think it's great for braintree if they get acquired by PayPal.
Unfortunately, I won't use their service since PayPal is one of the worst run
companies I can think of aside from eBay. The CEO of Braintree doesn't control
the company, the majority shareholders do (and in this case it sounds like it
will be PayPal).

~~~
the_watcher
>> PayPal is one of the worst run companies I can think of aside from eBay.

Probably related.

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frank_boyd
Seems like an inevitable downgrade to me - real pity.

Also, as always, less competition means a worse overall offer for devs.

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goronbjorn
As with all acquisitions, if they give them a healthy amount of autonomy and
give them more resources than they would've had as a startup, then I can see
this going pretty well. Huge and improbable "if", but it's worth pointing out.

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codex
PayPal and Square are engaged in a pitched battle to win mobile and small-shop
business. Square does about 10% of PayPal's volume.

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Felix21
If stripe was a public company, their share price would increase today and
even more-so when this is official.

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dcc1
Good thing i stayed away from braintree, paypal be a perfect match for them
considering both are shit

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teh_klev
Thank you for that low brow insight gem.

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dcc1
My business nearly went under because of SHITPAL

how is that for an insight?

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the_watcher
Braintree is much better.

