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Comment by Ixiaus | Hacker News Reader

Boy, everyone is so negative about the purchase on here! Braintree's customer base is far too large at this point for PayPal to just shut it down; that would be terrible PR because Braintree is critical to many businesses at this point. It's also not that easy to just go rip out one processor for another on a huge legacy code base.

PayPal would be making things worse for themselves if they did that and this purchase, is IMHO, an attempt to make things better for them and to bring them into the modern software world. I'm sure they also acquired Braintree for their engineers!

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Yes, and PayPal definitely has a history of not upsetting its customers, avoiding negative PR, and not making things worse for themselves. We can certainly bet on them to handle this acquisition in a reasonable way.

Show me a company working as a purely Internet bank of sorts and I'll show you a company with pissed off customers. Truth is, this business is very hard. For every time Paypal misidentifies a target and blocks their payments, they correctly identify scammers many more times. We tend to think "is it that hard to tell a scammer from blah legit site?". The answer is yes because guess what scammers are thinking everyday when they wake up? They are thinking 'how can we look more like a legit business so our payments go through'.

I say this as someone whose had to go through paypal's painful process several times in over a decade of use.

Ally Bank seems to be doing pretty darn well...

Ally Bank also makes your account next to useless until you go through a very tedious verification process from the get go. In my case, they mailed me some documents that unsurprisingly I never ended up bothering with.

On the other hand you can sign up and begin using paypal in minutes.

> On the other hand you can sign up and begin using paypal in minutes.

Yes indeedy by deferring the "very tedious verification" process until it massively impacts your business and PP has you by the balls.

If you're suggesting that Ally is an alternative to PP, that's nuts. I can see why businesses might be attracted to Ally over PP because of better customer service, but better customer service won't matter if you're not getting the volume of business that may be driven by PayPal.

I think he's suggesting that he can "Show me a company working as a purely Internet bank..." without pissed off customers.

Ally Bank is doing quite well because it managed to ditch the millions of pissed off customers it had when it was General Motors credit department. Give them time and I'm sure you will manage to piss everyone off again, despite their shiny rebranding.

I don't think the problem with Paypal are the payment blocks with no notification, the problem is their complete and utter refusal to talk to the customer about it.

They have anti-fraud systems. Fine. Fucking let me talk to someone who can put their fingers on the keyboard and get it sorted out without a front page article on Hacker News, Reddit, and The Consumerist to shame them into action.

Very fair point.

Exactly. This is exactly what Braintree was positioning itself against, offering a 'human touch' to every interaction and having a real person to review the details if you need to scale your business et al.

We can only hope PayPal learns something from Braintree & hopefully change them for better or they may end up like PayPal. Only time will tell.

As a business they have done great. So, Congratulations to the entire team at Braintree.

PayPal has been trying hard to change this image. David Marcus, who took the helm, has been shifting focus on customer satisfaction. Here is an interesting article on David Marcus: http://pandodaily.com/2013/08/12/if-its-not-broke-break-it-h...

Mm, I don't put much stock in that. Basically, talk is cheap. Marcus posted a lot of flowery language and PayPal's activity does not appear to have meaningfully changed.

The MailPile thing happened at the beginning of this month - the fact that this can happen at all, and, as usual, nothing was fixed until that bad press started to roll in, points to a systemic problem and culture at Paypal that just changing a CEO isn't going to fix in a reasonable amount of time.

I can tell you from personal experience and experience of 25-30 others here.. Its a smoke screen. The last few people who tried to do what David says to media have either been canned or now serving in timeout zone. Again the President means well but culture internally is much worse. Its a company filled with people whose skills are way past their prime trying to hold on to what little mileage left. David wants things to change but the middle layer won't. More often than not they are the ones who make calls on day to day operations. Many senior execs who tried to get shit done were moved out by these politicians. Even today diplomacy/politicking is valued in the company over talent or Data or logic/reasoning.

as far as topic at hand is concerned, MR from Braintree will be working closely with DM and directly. So expect only good things. Buying Braintree is a business play. (Just check out their numbers and clientele). PayPal can try to get clients like AirBnB or Uber but those startups would try every other bush before PayPal.

Hope this helps

P.S: I work for PayPal and probably one of the strong proponents of it. The above opinions are purely mine. and No i have not been canned or put in a timeout box.. yet!

I've seen similar anecdotes before, but what I don't understand is why obstructive middle management haven't been shown the door. If it really is a mid-level problem how can the politicians manage to hold off executive management? And if they really are the problem, and both the front-line guys and executive level are willing to change, what reason is there to keep the naysayers around instead of firing and then promoting from within?

No doubt there have been horror stories coming from PayPal and I wouldn't use them as a payment platform. You also have to realize though that people of all demographics use PayPal and their fraud detection/handling reflects that, I think.

People use PayPal for receiving small illicit drug shipment payments to paying their contractors to recurring payments for their service.

You cannot expect to have a great time on a service that is catering to everyone because the lowest common denominator will always ensure the organization has to be on-top of fraud and illicit activity.

I've been waiting for PayPal to do something to show that they are thinking about their long-term health and position in the market and this acquisition is exactly that. It will be interesting to see how competitors (like Stripe and Balanced) end up for this too!

avoiding negative PR

They unfroze Mailpile's funds recently. That's a sign of good things.

But only after the requisite outrage fest on here and other sites. The fact that it takes a front page article on a site read by a lot of industry people to get them to do the right thing is... disheartening, to say the least.

Braintree processes ~11b/year. Paypal ~$145b/y.

This year Paypal expects to process on mobile twice as much as Braintree is processing as a whole.

The margins in this business are very small, .9% transaction fees on 11b are not that huge.

Where Braintree misses the opportunity is gathering better for young startups that are in the early growth phase. 100 EUR monthly minimum on .10c/trx fees is not easy to digest in the beginning.

Where did you hear that Braintree is going to a 100EUR monthly minimum?

https://www.braintreepayments.com/

"Interchange +.9% + €.10 per transaction. €100 per month minimum • Everything included • No additional fees". This is probably shown only to EU visitors.

I also confirmed this with braintreepayments support and their reply was: "The €100 is a monthly minimum based on a per transaction fee of €0.10. For example, if your first month of transaction charges are €68, you would need to pay an additional €32 to 'top up' the amount. Interchange + 0.90% is not part of the calculation. Only the per transaction fee of €0.10 is used to calculate the €100 monthly minimum."

When I switch the site to "United States" it reads: "2.9% + $.30 per transaction. No additional fees • No minimums • Everything included"

Extremely annoyed by seeing this minimum applied only to the EU countries!

> Extremely annoyed by seeing this minimum applied only to the EU countries!

I would take a 100€ minimum over a 320% increase in transaction fees (2.9% vs. 0.9%) and a 130% increase in fixed per-transaction fees (0.10€ vs. $0.30 at current exchange rate) any day of the week.

Unfortunately it's interchange + 0.9%, not just 0.9%. Interchange ranges ~1.2-2% so the difference gets much smaller.

With a 100€ minimum the 10c transaction fee becomes 10c only after the first 1000 transactions (1000*0.1=100). If ignoring the variable part of the fee (%) then the break-even for this 10c vs 30c transaction comparison is at ~333 transactions. For a new company it takes a long time to get the first 333 monthly paying customers.

FYI: Of the total Paypal is processing i.e. ~145B/year only half is Paypal branded i.e. appx $70-80B/year, the rest of it goes through Verisign gateway

I don't know about the future of Braintree but I know that this acquisition is bad for the e-commerce market. It's an irony that companies challenging the status quo end being part of it.

I definitely agree. Contrary to the negative perceptions, there is a major opportunity to market the BrainTree service to eBay's small to mid-size merchants along with other services as part of a professional ecommerce store-in-a-box approach. eBay can bundle every aspect of the sales funnel from customer acquisition through actual credit card purchase. BrainTree could also be used as a replacement for PayPal Payments Pro.

They've bought payment providers in the past. The last big one was Verisign Payments and they've kept that running as a separate product since 2005! https://www.paypal.com/cgi-bin/webscr?cmd=xpt/Marketing/gene...

I also doubt they'll shut down Braintree or roll it into the main product.

The key to note about Verisign purchase is that of the appx. 1/2 of $145B/year volume that paypal processes is through the verisign gateway which is not paypal branded. Verisign payments are about half of total so it was a good acquisition

I'm with you Ixiaus. Congrats to everyone everyone at Braintree!

  > It's also not that easy to just go rip out one processor 
  > for another on a huge legacy code base.

Unfortunately true. It's always a good idea to support more than 1 processor, ideally all used actively.

I've see many companies get burned by only having one. It takes ages to get another processor up and running.

Using more than one payment processor is definitely a smart move. Not only to avoid unpredictable consequences such as this acquisition, but also because it will give you a negotiating advantage as payment processing becomes more and more of a commodity.

From an engineering perspective at my last job, having multiple also allowed us to abstract away the processors themselves into ways that made adding a new one pretty painless. If one went down, we just failover seamlessly.

I agree that it is still too early to tell if something good will come out of this or not. I am especially curious if Braintree customers will get access to PayPals superior transaction risk assessment technology. That might be huge for people that use Braintree for marketplaces.

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