
Balanced payments is shutting down - dynabros
https://www.balancedpayments.com/stripe
======
pc
Stripe cofounder here. I just wanted to tip our hats to the folks at Balanced.
Stripe and Balanced have certainly competed against each other in the
marketplace space for a few years, but we have a lot of respect for how Matin
and his team executed with creatively and determination. While we're of course
glad Balanced decided that migrating to Stripe was the best thing for their
users, today is kinda bittersweet for us.

~~~
keithwhor
Any plans for escrow services? That was the one pain point balanced tackled
that Stripe has yet to provide a solution for.

~~~
pc
You can control the transfer schedule for your recipients, which should
effectively cover what you need to do. (Sorry this isn't clearer in the docs.)
Feel free to email us, too. I'm patrick@stripe.com.

~~~
ewang1
Any chance you guys are going to support funding the marketplace balance via
the bank account?

------
buro9
I never used Balanced, but I want to really commend this announcement.

It is the first announcement of such a kind that comes with a well-considered
and already provided migration plan for customers to ensure no loss of
service.

That's a great standard to work to... leave yourself enough runway to look
after your customers.

The Balanced team should feel incredibly proud of managing such a co-ordinated
shut down whilst under the stress and emotional turmoil of closing a company.
It speaks volumes.

~~~
pnathan
Yes, they should! This is a very mature and responsible shutdown (I'd also
expect it to be mature and responsible, since payments are Very Important,
but, on the other hand...).

+1 to the Balanced executives for being mature.

~~~
Pyxl101
Definitely a mature approach, and it's definitely better for Balanced
customers to have a migration plan. However, I don't think we can assume that
Balanced "[left itself] enough runway to look after [its] customers" or that
the primary motivation is maturity.

Balanced may have offered to sell their customer base to Stripe (or sell the
company to Stripe, which presumably was refused). If Stripe accepted a deal to
purchase Balanced's customer base, then it might have provided as payment, in
part, an injection of cash to keep Balanced running for 90 days to implement
the migration and hold up their side of the deal. Balanced might have
suspended operations already if not for the hypothetical cash payment.

I'm not saying it would be wrong for Balanced to make that decision -- it's
certainly better than shutting down! I'm just pointing out that Balanced may
have other/more complex motivations for doing this than maturity, altruism,
and leaving behind a good legacy. Balanced might be equally looking after its
own shareholders by selling its (perhaps) most valuable asset: the customers.
(The value of that asset crashes once Balanced ceases operations or announces
its intention to do so, since its customers will immediately move to a
competitor. Thus, this asset can only be sold while Balanced is still
operating.)

I have no data - I'm just speculating. However, would a responsible board
allow a company to continue to operate and burn cash for 90 days _solely_ for
the purpose of migrating customers to a competitor, and taking further losses
in the process, when it could shut down instead and disburse its remaining
assets to shareholders and creditors? (I do not intend to cast asperions on
Stripe or Balanced. There's nothing wrong about this if it's what happened -
it's rational and in everyone's interest.)

~~~
judk
Doing the right think for a fair price is pretty much the definition of
maturity.

~~~
amirmc
The concept of 'doing the right thing' is a matter of perspective. In other
words, people may have vastly different ideas about what the 'right thing' is,
in s given situation.

------
jfoster
Interesting. Google Wallet for Digital Goods shut down last week. It was a
service whereby a business might have subscribers on a monthly subscription.
Google offered no migration path; businesses had to inconvenience all
subscribers by getting them to re-subscribe. It's fascinating that a startup
which is going out of business acts in a more responsible manner than a huge
tech company.

Kudos to Balanced for doing the right thing.

~~~
eviluncle
I'd like to be as optimistic as you are about this act by balanced, but I
can't help but suspect there was some kind of deal between the two companies.
After all, this will bring new business to stripe...

~~~
lbotos
Even if so, is Google above handing off their customers to a service that is
similar?

------
tbrooks
Really, really bummed.

My v1 was orignally built on Stripe and I moved to Balanced quickly after they
launched, because they offered ACH and escrow balance, etc.

Whenever I moved over, Mahmoud (Balanced CTO) stayed up past 1am to help me
migrate. That instantly won me over. The entire team was super responsive and
every interaction I had with the Balanced team was superb. Sorry to see this
company go away (tear).

We run a non-significant amount of money through Balanced and hope that Stripe
is a good fit. Not looking forward to re-writing our payments engine from the
ground-up in 90 days :/

~~~
bkrausz
Yea, Patrick phrased it well when he said it's a bittersweet day for Stripe.
We have a ton of respect for the team and what they've built.

Hopefully we can make the transition as smooth as possible. If you run into
any trouble, feel free to email me at bkrausz@stripe.com.

------
billclerico
One side note (from a cofounder of WePay here). WePay is 100% focused on
serving the needs of two-sided platforms like marketplaces - and now we're the
only company that can claim to do so.

We're bummed to see Balanced go, as I think they have a great product -
indicative of what a focus on the space can produce. But we're excited to
carry the torch forward.

We process billions annually and have crossed the scale chasm that the article
describes (and have raised a fair amount of money to boot).

If any Balanced customer (or other marketplace) would like to chat, I'm happy
to do so. Shoot me a note at bill@wepay.com

~~~
ianhawes
As a former customer of WePay, I'd like to warn everyone considering using
WePay that their compliance department will shut you down multiple times,
decline to specify why, then freeze all funds within your account. WePay is
completely out of touch with their customers, and I would recommend Stripe
over WePay any day.

~~~
ianlevesque
Sounds like PayPal all over again

~~~
tim333
I guess it's inherently a hard problem serving two sided markets as the
Russian criminal types are straight away going to set up a shell companies
pretending to be something respectable on one side and feed in stolen credit
card numbers on the other. Still you'd think they could do something
transparent like delaying sending the funds for a couple of weeks while they
contact say 10 credit card owners to see if the transactions are legit.

~~~
pbreit
But you typically need to freeze funds when doing that.

------
Cieplak
Balanced engineer here. I wanted to say that it's been an invaluable
experience to be here at Balanced. In spite of the bad news, I can't but help
but be grateful for having had the opportunity to work with the small but
extremely competent team here. I've grown immensely and want to give a shout
out to @mahmoudimus, @mjallday and @msherry who are the most talented
engineers I've ever met. The saddest thing for me is prospect that I might not
be working with them in three months from now, but at least I know that they
will surely go on to do amazing work.

------
rl3
[https://github.com/balanced/www.balancedpayments.com/commits...](https://github.com/balanced/www.balancedpayments.com/commits/master)

Even in death, Balanced's radical commitment to transparency lives on.

I'm not aware of any other companies with similar traction that have literally
put their main website on GitHub.

What a sad day.

------
q2
Compared to stripe[0], balanced[1] took very less funding as per the data.
Reading from the comments here, their service seems to be liked by users.

In that case, may be they should have looked into funding aspect rather than
shutting down and funding might have helped them to become large,independent
player as they wished.

Since YC backed, funding should not have been much difficult either. So it is
surprising,seeing from outside. Am I missing anything here?

[0] [https://angel.co/stripe](https://angel.co/stripe) [1]
[https://angel.co/balanced](https://angel.co/balanced)

~~~
patio11
So let's not make this story about Balanced, but let me spin you a yarn of a
totally hypothetical company named FooCorp, which has a plan to disrupt a
sclerotic two-sided marketplace.

FooCorp has a team of talented product people working for it. They've got a
gleam in their eye and a story on how they're going to attack a ridiculously
large market. FooCorp easily sails to an angel round sized in the high six or
low seven figures based on this.

FooCorp then hires, say, a half-dozen engineers to help their founders build
things out. These engineers have AmaGooBookSoft pedigrees and cost $8k
apiece... every two weeks.

FooCorp's product is quite beloved by early users. They accelerate hiring and
marketing. Things are going swimmingly.

The founders of FooCorp, having the best of advice from mentors and friends,
start trying to put together an A round, which will be millions or tens of
millions of dollars raised from professional investors.

"People love us."

"How many?"

"... Well, a growing number."

"What's the monthly growth rate."

"We've got a wonderful graph."

"Kid, I'm a professional at this and have heard every possible dodge. Give me
numbers. What's your marketplace volume?"

"Millions."

"NOT A RESPONSIVE ANSWER."

"... Two million."

"Per what?"

"... Total."

"Cool. OK, I think we have what we need here. Keep us apprised of your
progress. We really like you and the team." which is VC for "We will not
invest but if you want to give us a free no-obligation option on investing
because you're new at this then we'll take it."

Seed is raised on the dream. A rounds are raised on the metrics. If you don't
have the metrics, you don't raise an A round. If you've hired in the
expectation of an A round, and you don't either hit profitability before your
money runs out or hit metrics which justify an A round, your company
unceremoniously dies. This is _by far the most common outcome_.

This is sort of the talk-of-town right now, generally phrased as "Series A
Crunch."

~~~
q2
>>> Seed is raised on the dream. A rounds are raised on the metrics. If you
don't have the metrics, you don't raise an A round....

These are golden words which all budding entrepreneurs need to remember rather
than getting carried away by seed funding/hype. Thanks.

------
flangston
Sorry to see Balanced go. They were definitely the most flexible platform
available and always pushed the envelope.

If you're not using Spreedly, I recommend it because it's a big help in this
situation because it allows you to seamlessly switch services without losing
any of your customer card data.

~~~
patio11
_If you 're not using Spreedly, I recommend it because it's a big help in this
situation because it allows you to seamlessly switch services without losing
any of your customer card data._

Strongest possible +1 for this. I did a live migration from Paypal to Stripe
in under 30 seconds once. Spreedly made this as easy as flipping a
configuration switch. As far as I can tell, we didn't lose any business as a
result of the migration.

I don't see any reason I'd ever move off Stripe (+) but it's more than worth
just preserving the convenient-doesn't-require-app-rewrite option to do so.

\+ Edit to add: Ooh, got one: an acquirer can dictate a move to their
favored/house processor as a term of an acquisition, and "Sure, give me six
weeks to do engineering work" is _not_ something you want to have to worry
about when putting that deal together.

~~~
pbreit
I think it's generally better to code directly to one provider and in the very
rare instance you need/decide to change, go ahead and do the relatively easy
work.

------
icelancer
Was worried about this for some time. They didn't support major third party
shopping carts and ignored Github support tickets for months on end despite
IRC help staff suggesting to submit them.

They had great payout rules but when Stripe cut down on those times...
Balanced was in a bad spot.

Happy to see they will transition smoothly to an industry leader, even if
their platforms aren't even close to being the same.

~~~
tonyhb
It's such a shame. They had a really good way of working. Their open API and
product roadmap on Github was awesome. They had future plans for
cryptocurrency and foreign markets. Their API worked beautifully.

The only reason they've said is that they weren't big enough to be as
innovative as they wanted.

------
keithwhor
Huge win for Stripe. As a technical lead, I will (personally) never rely on
smaller players for payment processing from this point forward. This just cost
our engineering team three weeks of work, when we were debating just
transitioning an old product to Stripe to begin with. We decided to stick with
balanced.

Stripe has now certainly solidified a dominant market position.

~~~
jareau
(Balanced co-founder)

Hi Keith, sorry for any inconvenience this has caused you and the Storefront
team. Feel free to email me if you need any help with the migration:
jkwade@balancedpayments.com.

I sincerely appreciate the faith you placed in Balanced. I'm sorry we couldn't
keep it going, but you're in good hands with Stripe.

------
nhangen
This felt like an April Fool's joke at first. I mean...I understand that
Stripe is crushing it, but Balanced has a great product, and it really felt
like they were making incremental gains in the marketplace.

No matter how you slice it, competition is good and necessary, and it really
sucks to see this happen to a good team.

------
steveklabnik
Sad to hear this news. I had a wonderful time at Balanced. Payments is a very,
very hard space, business-wise. All my best to my former co-workers.

~~~
arthurcolle
Why is it hard, specifically?

~~~
dangrossman
Getting a money transmitter license in virtually every state, many of them
requiring six-figure surety bonds, is just one of the many hurdles before you
can take your first customer. First you have to raise the cash, then you have
to deal with at least this many government agencies:

[https://www.paypal.com/webapps/mpp/licenses](https://www.paypal.com/webapps/mpp/licenses)

------
ZeroMinx
Before this announcement, I'd never heard of Balanced.

Reading comments, some people are saying it was a great service. But, it's
shutting down, while services less great carry on.

This is hard for dev people (like myself) to realize, but if you're looking
for commercial success, marketing is generally worth more than the quality of
your product.

~~~
frabcus
Good marketing is _part_ of a quality product.

A key stage is hearing about a product at all - it is completely useless if
you never hear about it.

See my blog post "How to use time-travelling anthropologist pollsters to tell
good from evil marketing": [http://www.flourish.org/2013/04/how-to-use-time-
travelling-a...](http://www.flourish.org/2013/04/how-to-use-time-travelling-
anthropologist-pollsters-to-tell-good-from-evil-marketing/)

------
bbissoon
The problem is that Stripe requires sub merchants to create an account as
well. Whereas Balanced, the account process was part of the API so your
customers stayed in your application. That's going to be the biggest blow to
the UI.

~~~
bkrausz
With our Transfers API[1] you can send funds to recipients in the US without
requiring them to sign up for a Stripe account.

[1] [https://stripe.com/docs/tutorials/sending-
transfers](https://stripe.com/docs/tutorials/sending-transfers)

~~~
dirtyaura
What are the reasons that you don't support Transfer API in Europe? We would
need that but are forced to operate with a different model on a top of
Braintree at the moment.

~~~
bkrausz
There are a lot of reasons, but the short answer is we're aware of the demand.
Stay tuned :).

~~~
dirtyaura
Awesome! Thanks!

------
bbissoon
During the migration, is our information ported over to Stripe or is it
replicated? I want to start the migration but it doesn't specify whether or
not it will cause Balanced users to lose access to the API all together.

~~~
bkrausz
Information will be replicated, including newly added information. You can
click the migrate button, integrate over the next 90 days, and switch over to
Stripe with no discrepancy in information.

Balanced's meta fields will contain the Stripe IDs they were ported to, so you
can migrate over to new objects incrementally.

------
dblock
We are very sad to see Balanced go at
[https://www.artsy.net](https://www.artsy.net) \- we were an early and loyal
customer. Balanced has been very good to us throughout the years. Thank you.

We've actually had some support for Stripe too for a small service, an
experiment, but were going to delete it and continue using Balanced 100% of
the time.

~~~
bkrausz
I'd love to hear why you were going to stop your Stripe usage. Totally
understand if it was for the sake of consolidation, but if there were product
needs that we weren't hitting it'd be great to know :).

~~~
popnfreshspk
Without pre-funding and escrow it's really hard to manage B2B relationships
with the Stripe feature set. Ease of disbursement is a use case that made us
choose Balanced over Stripe in the first place

------
ewang1
The inability to transfer funds into Stripe makes it hard to use it as a
payouts mechanism like you can with Balanced.

~~~
ianhawes
There is a way to transfer money into Stripe, however the percentage is not
capped at $5 like Balanced does. Very disappointing.

------
santiagobasulto
90 days doesn't seem enough time at all. We run a big system on balanced.
We're fucked.

~~~
treeface
This is one of those moments where good programming architecture and
integration testing becomes obviously useful. We have a payment gateway
interface and the transition to Stripe will be relatively painless after
accounting for some accounting differences in how fees are charged.

~~~
santiagobasulto
Totally true. We didn't do a great job in this case. At the end, programming
can be summarized in two words: interfaces and abstractions.

------
martinshen
I think it's simply amazing what they built with a very limited amount of
funding ($3.6M announced). Looking at there fundraising efforts, it looks like
they never managed to get to a Series A. I wonder why?

------
nodesocket
I'd argue the Balanced dashboard (Ember.js) is superior to the Stripe
dashboard. Their technology, design, and engineers are exceptional, but just
shows how important market, positioning, and being first is. The "startup
game" is brutal. They had everything in place... YC company, top tier
investors (Andreessen), great product... The market just overwhelmed them.

------
downandout
That sucks. They were the only people in the payments industry that could (or
would) do same-day transfers to your bank account. The best Stripe will do is
a 2 day rolling schedule.

~~~
tomasien
Stripe does that now too which may have contributed to this.

~~~
downandout
How do you get that to happen? There is nothing in the docs about it.

~~~
vampirechicken
Probably by becoming a highly-trusted, low-risk customer. Payment balance
float is all about holding some money in reserve in case of chargebacks. The
better your stats are, the less money a processor will insist on holding in
reserve.

~~~
downandout
Balanced did it by default.

~~~
vampirechicken
I'm not familiar with the volume of data that balance collected at signup. But
I am familiar with the volume of info in the PCI's "Know Your Customer"
initiative. I i'm going to speculate wildly that balanced got to know their
customers during onboarding, rather than waiting until after they started
processing payments.

Additionally, I think that a company's level of trust with their customers
involves some 'coefficient of risk' regarding potential losses to chargebacks
against a low or non-existent reserve. I find the topic interesting,
especially the consequences at a federal level if you guess wrong and the
"customer" turns out to be laundering money.

------
ryduh
I'm so bummed about this. We choose Balanced for www.seedwise.com specifically
for its per order escrow feature. We'll be missing that in Stripe as we move
over.

~~~
pc
You can fully control the transfer schedule for any recipient with Stripe -- I
think this should do what you want. (Feel free to drop us an email if you're
having trouble; I'm patrick@stripe.com.)

------
minimaxir
It's worth noting that Balanced Payments was YC W11, which probably made the
transition to Stripe a little smoother.

~~~
revisedallocute
they also share same bank. that is bigger contribution to ease of transition.

------
joshstrange
90 days to rewrite your payment stack.... Damn, I feel sorry for any startups
using Balanced. A startup I worked on used Balanced but went under well before
this announcement but had I still been working on it this would have been
terrible news (it still is). I really liked balanced and "kickstarted" their
debit card push stuff (I have a t-shirt from it). I'm sad to see them go,
really wish they could have given more than 90 days though, that's a lot of
work in 90 days and god forbid the person who wrote your payment stack is no
longer with you...

------
tghw
It's too bad. Balanced was the only service of it's kind to provide ACH
payments. Hopefully Stripe or Braintree will pick up this feature.

~~~
bkrausz
Stripe has an ACH beta we're letting all Balanced customers into.

~~~
chrisduesing
We're a marketplace that uses Balanced's ACH + escrow for moving money between
buyers and sellers. I am glad to hear you will be supporting this on Stripe,
but since I only have 90 days to migrate when will api/ruby support be ready
and where can we find docs?

Perhaps the docs are available as soon as I migrate? I am hesitant to start
that process until I have code written to support Stripe. I don't want to end
up with my data on Stripe going stale while I am still using Balanced to move
money. Of course I am only assuming that scenario is what would happen, the
announcement is pretty thin on details.

~~~
bkrausz
The Ruby bindings already support ACH via the "source" parameter (see
[https://stripe.com/blog/unifying-payment-types-in-the-
api](https://stripe.com/blog/unifying-payment-types-in-the-api)). We're
putting the finishing touches on a guide to make migrating code from Balanced
to Stripe as easy as possible: it should be out soon.

------
lostpixel
This is indeed very sad news. We at BillForward (YCS14) found the Balanced
payments platform for ACH very well designed.

Plaid and Stripe certainly have caught up and both and offer good ACH
alternatives. Best of luck to those migrating. Happy to chat with anyone who
is interested in help with gateway independent ACH payments and subscription
management. I'm on ian AT billforward . NET

------
ijohn50
Stripe are definitely kicking ass at the moment.

Paypal's login process is not very well thought out atm. If you go to
paypal.com log in, then 90% of the screen is taken up by an ad asking you to
sign up ( even though you are logged in ). You need to click on "My Paypal"
that takes up 3% of the screen, before you see your dashboard.

------
shurcooL
Sad to hear. I really wanted to see them succeed because of their open company
approach, and hoping it would catch on.

------
crsmithdev
I nearly joined Balanced a little over a year ago, but went another route. I
was really impressed with their founding team and employees, very much a class
act with some smart, passionate people. Sorry to hear.

------
shavenwarthog2
I'm sorry to see Balanced go. As CTO, I used their service and was always
impressed. The site and docs were clean and obvious, really helpful when
dealing with scary things like money. Kudos, Balanced!

------
kalu
What are the chances that Stripe paid Balanced to shut down? For Stripe, it
seems like good business to "buy" your competitors when they are young. Plus,
they would get a bundle of customers. And for Balanced, if the payment was
high enough, a decision to wind down could make sense for the investors.

Competition is generally good for customers. In the short run it seems
trivial... but in the long run it could matter in a big way.

Stripe: did you pay for Balanced's customers? If so, was it your idea to buy
or did Balanced bring it up?

~~~
sumedh
I dont think Stripe paid Balanced to shut down because the both the parties
would look bad.

Stripe could have just acquired Balance allowing the founders of Balanced save
face and Stripe gets Balanced's customers very cheap.

------
lgas
Sorry to hear this guys. I really wanted to see you guys triumph.

------
zrail
Not sure how I feel about this. Balanced has, until recently, seemed like the
more flexible, DIY option in the payments space. Their API had some pretty
neat features that I hope Stripe picks up at some point.

<shameless plug>

If you're looking to migrate a Rails app to Stripe, I wrote a short book that
may help you out.

[https://www.masteringmodernpayments.com/](https://www.masteringmodernpayments.com/)

</plug>

------
dvirsky
That's sad. I haven't used their product but I remember them fondly for their
excellent blog post about their rigorous unit testing and continuous
deployment methodology.

[http://blog.balancedpayments.com/balanced-payments-
operation...](http://blog.balancedpayments.com/balanced-payments-operations-
automated-testing-continuous-deployment-jenkins/)

------
ChuckFrank
Long shot. But if any engineers or developers from Balanced find themselves
with time in their lives and are interested in working on a marketplace that
optimizes prices discovery, I'd be excited for the opportunity to talk to
them. Drop me a line, I'm in town and I'd love to take you out for beers.

------
samora
This is kind of sad. Balanced Payments is one of the companies I look up to.
Very sad when you lose a role model.

------
kpowerinfinity
Really unfortunate development. I preferred using them to Stripe earlier
primarily because they made the job so much easier (order level escrow so we
din't have to maintain them ourselves). Not looking forward to the migration!

Wish Matin and the team at Balanced the very best for their future endeavors.

------
vertis
I have a lot of respect for a company that provides a clear way forward for
their users.

------
patcon
I am unreasonably bummed about this. Balanced was outrageously wonderful to
Gittip/Gratipay, which is near and dear to my heart... I would say more, but
I'm on mobile and quasi-drunkenly eating a Subway sandwich :/

------
retreatguru
Our startup Retreat Guru is using Balanced and we were impressed by their
vision and support. Sorry to see them go but looking forward to working with
Stripe. I wish them all well in their future ventures.

------
jesalg
This is truly surprising. Balance was indeed a worthy competitor to Stripe. We
chose them in my previous company because of their escrow feature and overall
focus on building marketplaces.

------
daryn
wow, this is a real bummer. Good luck guys.

p.s. Classy move on the migration plan.

~~~
itzmeank
Migration Woes ? Sudopay once and then keep switching payment gateways
easily... :)

------
thinkingkong
Can I just say how goddamned responsible that is. Thank you.

------
bbissoon
... Wow, after all that work building a product on Balanced.

------
hoboon
I interviewed with these guys a few years ago. Nice people, good people. I
don't have a web background but they gave me a fighting chance anyways.

I wish them the best.

------
colmvp
I just want to say to anyone who works at Balanced that your work was
exceptional and as a user, it was a huge blow to hear this news.

------
johnx123-up
Couple of months back I made a comment on why SudoPay looks quite useful in
this volatile payment domain. This again proves my point.

------
fermigier
Is there any chance that the full code base (not just the API and supporting
projects) will be open sourced ?

------
1945
Balanced really had a nice web app. Kudos to their team.

------
1viquas1
Wonder why I don't see "YC XX" after the company name like we usually see in
other recruit or fund raising posts from YC backed company.

~~~
mintplant
The person who submitted this didn't bother to put it in the title.

------
seivan
What a class act from Balanced. I've never seen anything like this before. I
just archived the site.

