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PayPal Acquires Braintree for $800M

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Re: PayPal Acquires Braintree for $800M

#21

Post by patio11 »

confluence wrote: post #6

Anyone got stats on the acquisition split between owning parties (founders/investors/employees)?

People always ask for this, and the answer is always going to be "We won't disclose that." Publishing the cap table is invariably going to be net negative for the people on it.

To the limited extent that having rough numbers helps improve your estimation of what the payoff matrix is if you build a business to where it is worth $800 million: typically, the founders would split several hundred million, most employees would get $X0,000 to $Y00,000, and exceptionally early employees plus key executives (CEO, etc) walk away with a few million. The remainder (several hundred million) goes to the investors.

Braintree's numbers might be different due to their bootstrapped pre-funding trajectory or due to choices made by the founders, but ultimately their numbers are their numbers.

Re: PayPal Acquires Braintree for $800M

#22

Post by dangrossman »

mithras wrote: post #20
dangrossman wrote: post #16

Earlier quoted context omitted.

That's why I only code against Spreedly [1] instead of directly against any payment processor. One API instead of 53, switch processors just by changing a variable, and you can securely store customers' payment info without locking yourself into any processor's vaulting solution either. 1: https://spreedly.com/

But instead you are reliant on Spreedly. Looks interesting though.

Which is a much better thing to be reliant on.

Payment processors are in the risk business -- becoming a risky account to underwrite, or their making a mistake in evaluating the risk, means you lose your account, any money that hasn't yet made it to your bank, and any customer info you have stored. Because the processor bears all the risk for chargebacks and bankruptcies of its merchants, it's an extremely thin margin business.

Spreedly is in the secure API business. They don't care much about the health of your business, the risk associated with your transactions, or anything else the processors care about. They just have to pass around messages and get paid a fee every time they do. It's a fat margin business.

The risk of losing a Spreedly account is much lower than losing a payment account. The risk of Spreedly suddenly going out of business is much lower than the risk of a small merchant account provider/reseller going out of business. And if you choose to stop relying on Spreedly, they'll hand you all your customer data (securely) to take elsewhere, which most gateways with card vaulting refuse to do. It's not a choice of who to commit to, it's freedom from vendor lock-in.

Re: PayPal Acquires Braintree for $800M

#24

Post by dhimes »

chromaton wrote: post #10

This has put me off of Braintree and on to Stripe, but not for the reasons you might suspect. You see, I still want to take PayPal payments from my customers who prefer it. But it doesn't seem like a good business to have all my eggs in one basket, and using a competing payment system gives me the ability to switch PayPal off if they try any shenanigans.

Those are exactly the reasons I suspected- and I whole-heartedly agree.

Re: PayPal Acquires Braintree for $800M

#27

Post by ashray »

dangrossman wrote: post #18
joshuak wrote: post #15

We were just about to add payments to our site, and Braintree was high on the list to checkout. Any other suggestions in addition to Stripe? -edit- This seems like a good list: http://gatewayindex.spreedly.com

If you do at least $3-5k/month in transactions, a real merchant account from a bank/ISO/MSP. I pay $0.05 + 0.04% markup over interchange. Even after the monthly and gateway (Authorize.net) fees, that's around 2%, compared to Stripe's 2.9% or PayPal's 2.2% (I qualify for their merchant rate discount). Amex cards are the only ones I pay more for by not doing a flat rate. [By coding against Spreedly, it's possible to do…

I'm more interested in micropayments but this interchange stuff seems a bit complicated. How would a $2 payment work out with interchange included ? I mean, what fees would apply for a $2 credit card payment ?
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