Hacker News new | comments | show | ask | jobs | submit login
Braintree Launches Instant Approval Product (yahoo.com)
21 points by ComputerGuru 1846 days ago | hide | past | web | 23 comments | favorite

It is interesting how Braintree, Paypal, Stripe, WePay* all offer 2.9% + $0.30 as their pricing model for processing credit cards.

Why is it exactly the same across all of these providers?

Credit card companies must be setting their prices so that all these companies need to compete on the same level.

What happens when one of them decides to do 2.89% or $0.29? Everyone is fighting over portions of pennies these days.

* WePay originally had 3.5% to try to buck the trend, but even they are now moving towards the 2.9+.30 model.

Unless you process an enormous amount of payments, you're going to be dealing with a reseller, because the banks don't want to deal directly with small fries, and $250 million USD per year can still be seen as a small fry in the payments industry.

So the reseller is going to mark it up a bunch. Plus, there are multiple rates (called interchange): a plain credit card is one rate, a card with points/miles is a slightly higher rate, a corporate card, - still higher, and a corp card with points/miles - higher still.

That's just one card type (say MVS/VISA), there's another set of interchange rates for AMEX, another for Discover, etc.

If you want to see this in action, talk to the people at you local bank about processing credit cards, or call intuit about one of their dongles. The interchange rates are part of the contracts.

The per tx fees (the $0.30 part) are built up out of several layers of the transaction including fraud review, and there may only be a nickel of profit built in on that side.

I think that all the providers are charging the same because they are trying to attract small businesses (SBs) SBs are notoriously price conscious, and if you go a tenth of a point higher, or three extra cents per tx, they'll use your competitor. So all the processors are priced about as low as they can go, and are trying to compete on features. They might all use the same reseller.

Additional data point: PayPal credit card processing (not PayPal payments) offers 2.2% + 0.30 now, with even more discounted rates if you're a trusted seller.

I don't think they compete on price much. They have different quality APIs, availability, support, etc.

Why haven't I heard of Braintree before? In every Stripe thread people are complaining about it being US&Canada only, and I've never heard someone suggest this instead (this works for businesses in Canada, UK, EU, AUS). Could someone give a quick overview how Braintree compares to Stripe overall?

Edit: Well, it seems that Braintree didn't compare to Stripe's offering before this Instant product. So, this is really great news.

BrainTree was more of a traditional solution, requiring a separate merchant account and a full underwriting process before approval. They also did not have 100% flat rates.

Now the have both.

The hidden truth is that the "approval process" will have to happen before you can move any serious money through any of these payment processors.

This comes from the Payment Card Industry, and their idea that you should "Know Your Customer," and US Treasury Department, which has zero tolerance for payment processors who take a cavalier attitude towards money laundering, and they go directly after the owners of the company, and press criminal charges.

So while you're selling 100 a month, you're not really on anybody's radar, but start processing in earnest, and they will want all of the info that a traditional merchant account process requires.

Believe me when I say that "Instant Approval" ruffled a lot of feathers with more traditional processors who were forced into long, involved approval processes by PCI.

So you can start immediately at an instant approval processor, but they'll want all the same into before you can get your money. If you search for horror stories, you'll find lots of merchants who signed up for these services who didn't read the fine print about their money being tied up, and complain loudly that the processor should have told them something that important.

You can get out in front of the process with these processors by talking to them. let them knwo that you're about to launch, or offer discounts or whatever, so your spike in volume doesn't look suspicious. That the in-depth approval process as soon as you can. They want to be your partner, but there are rules and laws that they're not going to bend or break for you.

BONUS: one of the reasons that credit cards don't like to be used for crowdsourced funding sites is that there is no guarantee that a good or service will change hands, and therefore they have a harder time telling legit crowdfunding from money laundering "oops, sorry guys, or idea flopped. thanks for the $200 thousand dollars!"

Michael from Braintree, here. I helped build our instant signup process.

You make an astute observation here. PayPal (and other folks who imitate their business model) have a earned a poor reputation for servicing startups whose businesses actually grow. Braintree has been winning clients away from PayPal for years on this score, and we absolutely will not embrace their model.

We are actually doing something quite different with our instant approval process. We've combined an easy signup form with years of experience and data from working with fast-growing startups. The result is truly a full underwriting process that helps us to understand your business, and can approve most merchants to accept credit cards online instantly. With an instant approval from Braintree, you will have your own merchant account and the assurance that when your startup takes-off we will be cheering for you, not witholding your funds.

Can you answer this question: Why do you need to look at the applicant's credit report?

For us, that's part of getting to know our client. Your question implies that you don't think it's necessary for us to check a credit report - I would be curious to learn why. Feel free to send me an email at mboeke@braintreepayments.com if you want to discuss.

I've built systems with both Stripe and Braintree. Stripe is so much easier to work with. Braintree's not too bad, but the implementation of Stripe is more straight forward.

I assume that's before Braintree Instant? Else it's apples and oranges.

If it is with Braintree Instant I'd love to hear more on why Stripe was easier.

Why are you assuming the API would change between instant and non-instant?

The only difference should be in terms of signing up. The API shouldn't change, nor should the integration process the GP was referring to change, no?

That's true. I assumed that Braintree Instant had a JS SDK/API similar to Stripe (which makes it DEAD SIMPLE).

But if it's just immediately access to their existing API without having to have a merchant account -- you're right. Good catch.

In addition to the newness of Instant - they've only supported EU/Canada since late August.

Braintree's engineering blog has been featured on HN many times, but no one ever talks about actually using Braintree.

I've used Braintree for about 5 years. They've always been excellent to work with. I know a couple of other customers of theirs, and all have had good things to say about them.

I've also used Stripe for billing (more recently), and they've been great as well.

If I were starting a new project that required billing, I would absolutely be looking at both Braintree and Stripe. Anyone who doesn't is doing themselves and their business a disservice.

Instant Approval with a personal credit check... doesn't say if it's a hard or soft pull.

Damn. Instant is only US customers at the moment...

Kristi from Braintree here. We're working pretty furiously to make the sign-up experience just as seamless for our international customers. Can't offer specific timing yet, but working hard to get there.

While the sign-up isn't quite as seamless on the international front, it is the same great software and APIs that our US clients use. So in the meantime, we'd love to work with you to get you up and running with us as quickly as possible.

One thing definitely not helping their cause is their crappy domain name. No offense as I'm sure their product is lovely, but stripe has a big advantage in terms of branding

In terms of branding Braintree has been around for a long time and is a very trusted name. They're very well known for being developer friendly and having great customer service.

I'm using Stripe right now but a brand goes well beyond the name...especially when you're talking about financial services companies.

No doubt

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | DMCA | Apply to YC | Contact