5 ms·

PayPal nears deal for Braintree Payments

53 points by minouye 13y ago

codex 13y ago
PayPal and Square are engaged in a pitched battle to win mobile and small-shop business. Square does about 10% of PayPal's volume.
1123581321 13y ago
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-proud-braintree#all_comments http://37signals.com/svn/posts/2800-bootstrapped-profitable-...
ciokan 13y ago
Too bad. I had nightmares with Paypal and always considered Braintree as a viable alternative. I'll be switching off soon.
t0 13y ago
But wont most of Braintree's customers jump ship rather than deal with Paypal? They're effectively killing it by buying it.
- pbreit 13y ago
  No. That line of thinking is incredibly tired.
  - tomlu 13y ago
    Why not? We switched from PayPal to Braintree explicitly because PayPal was too broken for our use case. Is there some indication to expect that Braintree won't be integrated into the rest of PayPal in the case of an acquisition?
  - bengotow 13y ago
    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 13y ago
      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 13y ago
        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 13y ago
        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 13y ago
        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 13y ago
    Aren't you a PayPal (or ex-PayPal) employee? Surely you might have a little bias here!
- palidanx 13y ago
  As a braintree customer, this deal does give me cause for worry since I jumped to Braintree because of paypal. However realistically, since all of our production code is already completed and tested against Braintree, we are not going to switch unless they do something really dumb like close their api. For me as long as Braintree continues: + Using their 'vault' for credit cards + Continues having a great api + Continues have great customer service. I'm going to watch and see what happens.
  - Aqua_Geek 13y ago
    I worry that PayPal might change the “Take your vaulted cards to another processor” policy… If they do, it’s going to cause a lot of headaches for customers.
    - jusben1369 13y ago
      This is one of the major value propositions with Spreedly. Independently vault your cards.
    - palidanx 13y ago
      Well that assumes that the business owner wants to switch out of Braintree. But you are right that if Paypal closes the garden, you are stuck in that silo. But on the other hand, it isn't so different than being walled into AWS for instance in terms of production impact time.
      - Aqua_Geek 13y ago
        It’s not the code changes or downtime you have to worry about — it’s convincing all of your customers to enter their billing details again (if you can’t get the vaulted cards transferred).
- tzs 13y ago
  > They're effectively killing it by buying it. I don't see how you come to that conclusion. This is not the first time PayPal has acquired a popular payment processor. In 2005, they purchased Verisign's payment processing business, Payflow Pro. I don't recall them making any noticeable changes to it after acquisition other than changing the word "Verisign" to "PayPal" everywhere. Is there some reason to believe that a Braintree acquisition will not be treated similarly?
  - thethimble 13y ago
    Absolutely. Companies approach Braintree because they want a no-bullshit payments processor. Based on PayPal's past antics it hardly it hardly has the reputation for which people seek Braintree. I think this is the perfect opportunity for Stripe, and other payments processors that cater to younger more progressive companies, to get some clients to jump ship.
    - tptacek 13y ago
      To read people like Patrick McKenzie, who ran businesses on Paypal and don't have a lot of negative things to say about their underwriting process, two big reasons why they've moved to Stripe: (1) The Paypal API is apparently extremely complicated (2) Processing payments with Paypal takes your users off your own site, which costs conversions Buying Braintree could immediately address both those problems for Paypal.
      - the_watcher 13y ago
        Yes, PayPal is awful once you've used Stripe and Braintree. I hope that if this happens PayPal just lets Braintree operate as it has before. Legacy PayPal users can keep PayPal, and PayPal doesn't have to fight the battles it has been fighting to keep customers from jumping ship, and can just onboard them to Braintree. Unfortunately, I'm not super optimistic about PayPal's competence.
goronbjorn 13y ago
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.
andrewhillman 13y ago
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.
- kintamanimatt 13y ago
  PayPal's problem isn't so much their fees (although that's an issue) but their utter disregard for their customers. The fact they'll arbitrarily freeze an account for seemingly nothing more than shits and giggles is counter to the kind of stable experience you'd expect and want from a payment provider. The fact there is little recourse when the fuckup fairy strikes is what's most concerning though.
- bigiain 13y ago
  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.)
marcamillion 13y ago
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 13y ago
  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.
  - jd 13y ago
    Although I don't know the specifics for Braintree, it's not contradictory to accept VC money for bootstrapped companies. If a startup goes from 0 to 10M revenue without taking any outside investment then that puts them squarely in the bootstrapped camp. However, if they then realize they're in a winner-takes-all market and that they need a lot of money in order to scale up, then they can still accept VC money at that later stage.
  - chinmoy 13y ago
    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-proud-braintree http://37signals.com/svn/posts/2800-bootstrapped-profitable-...
    - marcamillion 13y ago
      Thanks for providing that link...that's what I was remembering, but couldn't find it.
bready 13y ago
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-ever https://www.braintreepayments.com/blog/more-committed-than-e...
- dxhdr 13y ago
  Why so defensive? You clearly are commenting on the rumors... just sayin'. Cool company by the way! Sounds like you've had a lot of success. Paypal isn't very cool, though...
  - the_watcher 13y ago
    >> Paypal isn't very cool, though... That's where the defensiveness comes from. I love Venmo and do not like PayPal. Coming in here helped make me feel a bit better about this potential merge.
- thaumaturgy 13y ago
  > 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 13y ago
    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.
frank_boyd 13y ago
Seems like an inevitable downgrade to me - real pity. Also, as always, less competition means a worse overall offer for devs.
dcc1 13y ago
Good thing i stayed away from braintree, paypal be a perfect match for them considering both are shit
- teh_klev 13y ago
  Thank you for that low brow insight gem.
  - dcc1 13y ago
    My business nearly went under because of SHITPAL how is that for an insight?
    - the_watcher 13y ago
      Braintree is much better.
AdamN 13y ago
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 13y ago
  >> PayPal is one of the worst run companies I can think of aside from eBay. Probably related.
jbrooksuk 13y ago
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.
Felix21 13y ago
If stripe was a public company, their share price would increase today and even more-so when this is official.

53 points by minouye 13y ago

codex 13y ago

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

1123581321 13y ago

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-proud-braintree#all_comments http://37signals.com/svn/posts/2800-bootstrapped-profitable-...

ciokan 13y ago

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

t0 13y ago

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

pbreit 13y ago
No. That line of thinking is incredibly tired.
- tomlu 13y ago
  Why not? We switched from PayPal to Braintree explicitly because PayPal was too broken for our use case. Is there some indication to expect that Braintree won't be integrated into the rest of PayPal in the case of an acquisition?
- bengotow 13y ago
  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 13y ago
    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 13y ago
      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 13y ago
        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 13y ago
        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 13y ago
  Aren't you a PayPal (or ex-PayPal) employee? Surely you might have a little bias here!
palidanx 13y ago
As a braintree customer, this deal does give me cause for worry since I jumped to Braintree because of paypal. However realistically, since all of our production code is already completed and tested against Braintree, we are not going to switch unless they do something really dumb like close their api. For me as long as Braintree continues: + Using their 'vault' for credit cards + Continues having a great api + Continues have great customer service. I'm going to watch and see what happens.
- Aqua_Geek 13y ago
  I worry that PayPal might change the “Take your vaulted cards to another processor” policy… If they do, it’s going to cause a lot of headaches for customers.
  - jusben1369 13y ago
    This is one of the major value propositions with Spreedly. Independently vault your cards.
  - palidanx 13y ago
    Well that assumes that the business owner wants to switch out of Braintree. But you are right that if Paypal closes the garden, you are stuck in that silo. But on the other hand, it isn't so different than being walled into AWS for instance in terms of production impact time.
    - Aqua_Geek 13y ago
      It’s not the code changes or downtime you have to worry about — it’s convincing all of your customers to enter their billing details again (if you can’t get the vaulted cards transferred).
tzs 13y ago
> They're effectively killing it by buying it. I don't see how you come to that conclusion. This is not the first time PayPal has acquired a popular payment processor. In 2005, they purchased Verisign's payment processing business, Payflow Pro. I don't recall them making any noticeable changes to it after acquisition other than changing the word "Verisign" to "PayPal" everywhere. Is there some reason to believe that a Braintree acquisition will not be treated similarly?
- thethimble 13y ago
  Absolutely. Companies approach Braintree because they want a no-bullshit payments processor. Based on PayPal's past antics it hardly it hardly has the reputation for which people seek Braintree. I think this is the perfect opportunity for Stripe, and other payments processors that cater to younger more progressive companies, to get some clients to jump ship.
  - tptacek 13y ago
    To read people like Patrick McKenzie, who ran businesses on Paypal and don't have a lot of negative things to say about their underwriting process, two big reasons why they've moved to Stripe: (1) The Paypal API is apparently extremely complicated (2) Processing payments with Paypal takes your users off your own site, which costs conversions Buying Braintree could immediately address both those problems for Paypal.
    - the_watcher 13y ago
      Yes, PayPal is awful once you've used Stripe and Braintree. I hope that if this happens PayPal just lets Braintree operate as it has before. Legacy PayPal users can keep PayPal, and PayPal doesn't have to fight the battles it has been fighting to keep customers from jumping ship, and can just onboard them to Braintree. Unfortunately, I'm not super optimistic about PayPal's competence.

goronbjorn 13y ago

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.

andrewhillman 13y ago

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.

kintamanimatt 13y ago
PayPal's problem isn't so much their fees (although that's an issue) but their utter disregard for their customers. The fact they'll arbitrarily freeze an account for seemingly nothing more than shits and giggles is counter to the kind of stable experience you'd expect and want from a payment provider. The fact there is little recourse when the fuckup fairy strikes is what's most concerning though.
bigiain 13y ago
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.)

marcamillion 13y ago

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 13y ago
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.
- jd 13y ago
  Although I don't know the specifics for Braintree, it's not contradictory to accept VC money for bootstrapped companies. If a startup goes from 0 to 10M revenue without taking any outside investment then that puts them squarely in the bootstrapped camp. However, if they then realize they're in a winner-takes-all market and that they need a lot of money in order to scale up, then they can still accept VC money at that later stage.
- chinmoy 13y ago
  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-proud-braintree http://37signals.com/svn/posts/2800-bootstrapped-profitable-...
  - marcamillion 13y ago
    Thanks for providing that link...that's what I was remembering, but couldn't find it.

bready 13y ago

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-ever https://www.braintreepayments.com/blog/more-committed-than-e...

dxhdr 13y ago
Why so defensive? You clearly are commenting on the rumors... just sayin'. Cool company by the way! Sounds like you've had a lot of success. Paypal isn't very cool, though...
- the_watcher 13y ago
  >> Paypal isn't very cool, though... That's where the defensiveness comes from. I love Venmo and do not like PayPal. Coming in here helped make me feel a bit better about this potential merge.
thaumaturgy 13y ago
> 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 13y ago
  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.

frank_boyd 13y ago

Seems like an inevitable downgrade to me - real pity. Also, as always, less competition means a worse overall offer for devs.

dcc1 13y ago

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

teh_klev 13y ago
Thank you for that low brow insight gem.
- dcc1 13y ago
  My business nearly went under because of SHITPAL how is that for an insight?
  - the_watcher 13y ago
    Braintree is much better.

AdamN 13y ago

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 13y ago
>> PayPal is one of the worst run companies I can think of aside from eBay. Probably related.

jbrooksuk 13y ago

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.

Felix21 13y ago

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