we use braintree and it works fine. wouldn't mind staying, or 'switching' to square.
if paypal acquires them, we'd probably switch to square.
Braintree Is On The Block, Had Acquisition Talks With Square And PayPal
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Re: Braintree Is On The Block, Had Acquisition Talks With Square And PayPal
#22Anyone building a card processing business is going to have trouble finding long-term cash flow because the margins are razor thin. For example, Visa processed $6.7 trillion in transactions and made $10.4bn in revenue . I'd rather do business with someone like Balanced, who has a larger product vision than "well paypal sucks".
the margins are razor thin. For example, Visa processed $6.7 trillion in transactions and made $3bn in revenue. I don't care how thin the margins are, I'd love to have $3B of revenue.
Ha, wouldn't we all :) My point is only that it's damn hard to get to that number, and if you're a startup who's raised many rounds of capital, after a few years of grinding an acquisition by a company like paypal (read: ebay) starts to look like a nice option.
To put that Visa number into perspective, according to various reports Square did $15bn in transaction volume last year. So, if you use the same ratio of transaction volume to revenue (0.16%) that would put Square's revenue at $23.2mln. For what it's worth, that's probably a generous ratio, as companies like Square and Braintree are all use Chase payments tech as their processor, which itself has to pay out to Visa and other processors. So these firms' margins are likely much lower than Visa's.
As either a customer or a partner of one of these companies, I'd prefer doing business with a company that's building a base that doesn't essentially require acquisition if they can't grow to Visa's size.
Re: Braintree Is On The Block, Had Acquisition Talks With Square And PayPal
#23Earlier quoted context omitted.
> More recently, it had been in acquisition talks with Square, which also fell through, possibly because Braintree is asking for too high a valuation. > According to industry sources, Braintree has been asking for $1 billion, which seems unrealistic. It would seem that other suitors are trying to pressure Braintree to lower their target
Square processes $10b. BrainTree processes $10b. How is Square valued at $4b and BrainTree can't sell for $1b?
Growth potential, total potential market size, other possible revenue sources (e.g. Square Marketplace).
Re: Braintree Is On The Block, Had Acquisition Talks With Square And PayPal
#24Earlier quoted context omitted.
Both (leaning more heavily towards bad) Bad: Paypal as a potential suitor will make some existing and potential customers very nervous and that won't be good for customer acquisition. Other potential suitors may see other heavyweights passing on the deal as a negative. Good: The attention may increase the pool of suitors.
Exactly. We process over $1M a year with Braintree (that's why I posted this article). In my opinion, PayPal is the worst possible scenario short of Braintree shutting down. The thought of forcing thousands of customers to re-enter billing information makes me throw up in my mouth a little.
Nothing would be required of customers. They'd migrate the data over to Paypal's setup in such a scenario. Card data is stored with a symmetric encryption algorithm (e.g. reversible), so this type of thing could happen fairly easily.
Re: Braintree Is On The Block, Had Acquisition Talks With Square And PayPal
#25The CEO who got ousted, in 2011: “Without outside capital, we have to make do with less ... Constraints are a beautiful thing because they force creativity and precision. We don’t have the resources to throw after hit-or-miss hires or strategies. Bootstrapping a business requires a different mentality. It’s taught us to be frugal, hire slowly, and exercise caution as we grew the business. While companies that take fu…
I'm the former CTO of Braintree and one of the founding employees. I was there when Bryan Johnson hired Bill Ready as CEO and decided to move to Chairman. The authors of the TechCrunch article were either misinformed or speculating when they said that Bryan "lost his position" and that Bill joining was a "decision made by Accel." Bryan made the decision to hire Bill and move into the Chairman role without pressure from anyone.
Re: Braintree Is On The Block, Had Acquisition Talks With Square And PayPal
#26Anyone building a card processing business is going to have trouble finding long-term cash flow because the margins are razor thin. For example, Visa processed $6.7 trillion in transactions and made $10.4bn in revenue . I'd rather do business with someone like Balanced, who has a larger product vision than "well paypal sucks".
That $3 billion in revenue is for the April-June quarter, during which Visa processed $1.74 trillion in transactions.
Re: Braintree Is On The Block, Had Acquisition Talks With Square And PayPal
#27we use braintree and it works fine. wouldn't mind staying, or 'switching' to square. if paypal acquires them, we'd probably switch to square.
Do you mean square or stripe?
I don't see how Braintree and Square are interchangeable for anything other than physical point-of-sales use cases ... which doesn't seem like Braintree's sweet spot
Re: Braintree Is On The Block, Had Acquisition Talks With Square And PayPal
#28Anyone building a card processing business is going to have trouble finding long-term cash flow because the margins are razor thin. For example, Visa processed $6.7 trillion in transactions and made $10.4bn in revenue . I'd rather do business with someone like Balanced, who has a larger product vision than "well paypal sucks".
That $3 billion in revenue is for the April-June quarter, during which Visa processed $1.74 trillion in transactions.
Yep, you're right, my fault, will fix.
Re: Braintree Is On The Block, Had Acquisition Talks With Square And PayPal
#29Anyone building a card processing business is going to have trouble finding long-term cash flow because the margins are razor thin. For example, Visa processed $6.7 trillion in transactions and made $10.4bn in revenue . I'd rather do business with someone like Balanced, who has a larger product vision than "well paypal sucks".
Anyone know how the fees in the industry break down then ... $3bn is Though all I know is the headline rates quoted for most common processors where <2% seems very aggressive. Who gets the other 1.95% of that?
Re: Braintree Is On The Block, Had Acquisition Talks With Square And PayPal
#30Anyone building a card processing business is going to have trouble finding long-term cash flow because the margins are razor thin. For example, Visa processed $6.7 trillion in transactions and made $10.4bn in revenue . I'd rather do business with someone like Balanced, who has a larger product vision than "well paypal sucks".
Anyone know how the fees in the industry break down then ... $3bn is Though all I know is the headline rates quoted for most common processors where <2% seems very aggressive. Who gets the other 1.95% of that?
My apologies, I mis-quoted the annual number, which is about $10.4 bln, which is still only about .16%.
Still, your question, "Who gets the other 1.95% of that?", is valid. My guess: the card issuers themselves, who operate the networks (Visa, MC, Amex, Discover). Throw a little on top for Chase PaymentTech and the like.