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Comment by steveklabnik | Hacker News Reader

Yeah, unfortunately, Balanced doesn't have the same warchest that Stripe does, as they've raised way more funding than we are, so we can't use any of that money to price stuff mega cheap.

There are also multiple ways to build this kind of feature. Balanced is doing it 'the right way,' but you can fake it till you make it, and hope that Visa/MC doesn't get mad at you before you build out the real implementation. That way is also cheaper...

As an example of the benefit of 'the right way,' Balanced will be immediate for a large percentage of cards, rather than the 1-2 days that this page claims.

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What is "the right way", if you're allowed to disclose that? I remember that Square Cash was doing their transfer feature using refunds[1], is that the same way that Stripe is doing it?

[1]: http://jonbwhite.tumblr.com/post/66853226398/how-square-move...

"Unreferenced refunds" are the 'wrong way': the card networks don't like it for various reasons. ATM networks are starting to offer an API that just does this, which is the 'right way.' Visa OCT was mentioned elsewhere in this thread, for example. This means you have to integrate with a patchwork of different networks if you want to have good coverage.

I don't have any special insight into how Stripe is doing it, but the extremely low cost and the '1-2 days' sounds like unreferenced refunds. I could be wrong.

On a tangent: why does the wrong way cost less money than the right way? Is this a form of price fixing by the credit card companies? I'd imagine Visa could offer these at less money (or free) than MC but it sounds like that's not the case.

I don't have an enormous amount of insight into this, but what I can tell you is that in this industry, pricing is all about risk. The reason unreferenced refunds are cheap is because you're exploiting a loophole in the API, basically. The reason they don't like it is that it messes with fraud calculations, which messes with risk.

The 'right way' is basically a new product, in my understanding and so, like any product, they charge what the market will bear.

That post credits Square with the refund method, but actually they were not the first.

The first I know of is Giftly, a gifting startup (around 2010?). Maybe there are earlier examples.

> There are also multiple ways to build this kind of feature.

It sounds like both Balanced and Stripe will use them :-). But let's not turn this into a Balanced vs Stripe thread. It's not especially relevant for users and we'll stay out of the way when you guys have your public launch. Continued good luck!

> let's not turn this into a Balanced vs Stripe thread.

Hey, as I said below, I'm a Stripe customer: you guys are great. Frankly, I don't even see Stripe and Balanced as directly competing. Well, Balanced is deep in a vertical of one of your products. When I took the job at Balanced, I kept on selling my books through Stripe: you guys kick ass for that use case.

> we'll stay out of the way when you guys have your public launch.

That was gonna be today. ;) :(

Interesting this is a customer communication/acquisition channel for your business when many of us see it as a peer discussion forum. I hadn't really considered that before.

Oh, I think it is a peer discussion forum, first and foremost, and shouldn't be treated as a communication/acquisition channel -- which is why I think that having threads veer off into the competitive weeds does the forum a disservice. (As a reader, I find it kinda tedious when it happens in other threads.)

Do you think it's useful for peers who are building things to discuss the relative characteristics of their tools?

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