Why We Switched From Stripe To Balanced (and almost chose BancBox)

Wes Hather· February 28, 2013

It's amazing how easy it is to collect payments on the web these days. You can start charging credit cards on your website in less than 24 hours if you know what you're doing. With so many great payment API's to choose from, we ended up choosing Balanced. Here's why...

Integrating billing into an app used to be a pain in the ass. I remember integrating BrainTree into a previous startup back in 2008, and it was a four month long process. Applying for a merchant account to even start accepting credit card payments took at least three months to get approved. Furthermore, integrating BrainTree's API was no easy task and took us a couple of weeks to launch at the time.

Stripe changed the game, and made integrating payments into an app no more than a three day task. We integrated Stripe into GroupTalent in early 2011 and I couldn't believe how easy it was compared to our previous experience with BrainTree. The new standard had been set. However, it wasn't a complete solution; at least for GroupTalent. Stripe nailed collecting payments. But what about disbursing payments?

This is the way payments are collected and disbursed within GroupTalent:

Developer submits a sprint (usually a week's worth of work) to get funded by the employer Employer funds the sprint Developer begins work on the sprint Employer marks sprint as complete Funds get released to the developer

Stripe was great for number 2 but wasn't much help for number 5. Mollie, GroupTalent's Director of Happiness, had to manually pay developers through a Bank of America wire transfer. This worked great at the start but quickly ate up a ton of Mollie's time as we started to grow. We needed to find an automated solution to pay our developers, and we began looking around. After some digging, we found that the best two options available to us were BancBox and Balanced (previously known as PoundPay).

Both BancBox and Balanced have an escrow system in place and a way to automatically pay USA bank accounts via ACH. We decided to integrate with BancBox because they had support for ACH debiting (so employers could fund sprints via ACH) and also a way to pay international developers via PayPal. Two weeks of API integration time later, numerous email threads with support, and multiple phone calls with BancBox sales reps to get a production key, we decided to call it quits.

This is why we pulled the plug on BancBox:

Incomplete Ruby on Rails API: We ended up cloning the existing BancBox Rails API gem and added the missing methods we needed. Lack of API documentation: We were shooting emails off to support on a daily basis trying to get answers to simple API questions. There's surprisingly not a lot of BancBox API resources available. Needed to apply for a merchant account: You can use Stripe as your credit card processor, but then you're charged BancBox's 0.5% transaction fee on top of Stripe's 2.9% fee. You can get a lower rate if you use BancBox's integrated payment processor (Payment Express) but then you have to go through the whole merchant application process, which takes time. Balanced: We found out that Balanced was working on ACH debiting (which was actually just released today) and international transfers. We knew their API was much more documented than BancBox's, and we had better experience with their support staff prior.

Switching from BancBox to Balanced was cake. Integration was just as simple as Stripe, yet we also gained the automatic developer payouts and ACH debiting functionality that BancBox provided. In the end, the simplicity of the Balanced API outweighed the payout versatility that BancBox gave us.

As a review, this is what Balanced gave us that Stripe did not:

Built-in Escrow: Stripe doesn't have this functionality. With Stripe, we had to manually pay our developers through Bank of America wire transfer. If we integrated with Stripe Connect, we'd have to pay our developers immediately after receiving payment. Next day ACH Credit: I believe both BancBox and Stripe have a three day delay for their ACH credits. Our developers are really happy about the next-day ACH credit that Balanced gives us. Balanced also just added same-day ACH payouts to Wells Fargo customers. Two-day API Integration: Again, it only took us two days to integrate with Balanced. The integration was just as easy as Stripe's, and orders of magnitude easier than BancBox. Ability to add seller merchants directly within your site: I believe with Stripe Connect, sellers have to sign up and enter their bank information on stripe.com directly, which hurts user experience. With Balanced, the sellers (developers in our case) can enter their bank info directly through our site. Invoices are separated from transactions: Being charged the 2.9% in a separate transaction (not deducted from the original transaction) makes things much cleaner when divvy'ing up payments. So in our case, after a $10k sprint is funded, we can issue a transfer of $8k to the developer and $2k to ourselves. No need to worry about the 2.9% because you're charged later via a separate invoice, which is deducted straight from your bank account. Makes things super clean.

If all you need is a way to collect credit card payments, go with Stripe. But if you're a marketplace or you foresee yourself needing a way to disburse payments at a later date, Balanced is definitely your go-to.

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