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Comment by snackai | Hacker News Reader

So you guys relied on a single payment provider? And you chose a PayPal company to rely on? Well of course your accounts would be frozen someday. It's a PayPal company. Seriously what did you expect?

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I'd expect that most companies rely on one payment provider, at least in the early days. The cost of implementing, testing, etc. multiple providers is pretty high. I have only switched providers twice in the decade long life of my company, and only due to extreme pain from the previous one. It takes a lot to get me to sign on for the pain of a migration, and that's even more pronounced now that so much data ends up stored in your payment providers database; so, your customer data isn't even yours to migrate, anymore (AFAIK, I haven't crossed this bridge yet, but I guess I will one day, if Braintree, who I'm currently using, does something to make their service untenable for us).

Of course it is painful to implement a seconds provider for backup, but payments are their lifeline. And PayPal has a track record for stuff like that. Never rely your whole business on PayPal!

I saw a talk at the MRC conference by the woman who heads up payments for Facebook. They put a bunch of development effort into a tool that allows them to switch providers at will for exactly this reason. It not only gives them security, it allows them to seamlessly direct traffic to whomever is providing the best rates at any given time.

If you are Facebook, Amazon or someone like that it can make sense, but their level of sophistication is insane for someone that isn't making millions a month. At a smaller scale, the best that you can do is just to have bindings for the processors that do easy integration, but it's still a bunch of work that isn't going towards making more money, but towards insurance.

So putting sophistication on your payments platform is something that you should only care about once you are very successful anyway.

Yeah my bad, I didn't mean to suggest that their approach makes sense for everyone. I was just trying to support his point that reducing dependence on a single processor can be a beneficial practice.

We didn't, but cc transactions were the only ones growing from all other options of payment we have in the app...

This is what you'd spend time on, eh? If you had a startup you'd split payments between two providers and write payment processing for both, in case one holds your money.

Presumably you'd also hold three months worth of cash expenditures so you can maintain cash flow.

But in two separate banks?

In two separate currencies?

True, but this is a known problem with certain payment processors. Going under because a PayPal subsidiary screwed you is management (and investors who failed to do adequate due diligence) screwing up.

Nowadays, I highly recommend integrating with a tokenization provider, instead of with a payment provider directly. Payment processing is a commodity, and if your provider isn't fulfilling, switching is much easier. I've used Spreedly in the past.

But that is the fee, 1%? For some size of business, it's not worth paying a "double" payment provider fee to do the token provider thing (+ the extra development work)

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