#BalancedShutdown
Update: Gratipay has survived the Balanced shutdown.
Our payment processor, Balanced Payments, is shutting down in 56 days. This is an existential crisis for Gratipay; we’re treating it with that level of seriousness. The purpose of this blog post is to summarize the situation for Gratipay users, so that you’re aware at a high level of what’s going on and what it means for you. Today’s tl;dr is that we will have to change Gratipay in some yet-to-be-fully-understood fashion in order to survive the transition away from Balanced, and it will be hard.
Those familiar with the story know that Balanced Payments was much more than just a vendor for us. They were a close partner in launching the Open Company Initiative, so it’s extra disappointing to see them have to throw in the towel. It was a good run, Balanced! Sorry to see you go. :-(
We need to migrate as soon as possible, because we don’t want to be the last one out the door (what if they have an API failure a week before shutdown and decide it’s not worth fixing?). Balanced is offering an easy migration path to Stripe, but for various reasons it’s not clear that Stripe is the best option for us. This goes back three years to when we first launched, and then two weeks later our first payment processor disappeared on us. We quickly migrated to Stripe, but Stripe asked us to leave because we didn’t fit their model. We were casting about when Balanced picked us up. Now once again we’ve dusted off the same ticket from three years ago to coordinate the migration away from Balanced.
Our Options
We have three kinds of options for moving away from Balanced:
- Switch to another modern API (Stripe, Braintree, WePay, MangoPay).
- Roll our own solution using lower-level merchant account and ACH providers.
- Roll our own solution using non-traditional payment methods (Dwolla, Coinbase).
At this point we’re focused primarily on Stripe and Braintree, because they’re the most stable vendors with the most full-featured products. Braintree has approved us for a marketplace account and is communicating with us on GitHub and email. Stripe still seems nervous about us, but they’ve been responsive on GitHub as well and are working with us to find a way that they can have us on their platform.
The challenge is that Gratipay as it stands today doesn’t fit solidly within the regulatory frameworks of either Braintree or Stripe, so we’re going to need to tighten up in order to use either of those services. We’re still assessing the risks and changes. At this point the clearest, biggest hurdle is the need to zero out escrow. We currently have about $160,000 of “stored value” within Gratipay, and it appears that we’re going to need to disburse as much of that as possible, and operate much closer to zero escrow going forward. If you want to help out you can attach a bank account or PayPal (email us) to start withdrawing your part of the escrow now.
It’s going to take a lot of work to get this done. To be honest, it’s highly doubtful we could pull off a proper roll-your-own solution at all in the next 56 days, because any such solution will probably require similar changes as a modern API, with added hurdles and slowdowns to boot. The best option right now is to forge ahead with Stripe and/or Braintree, trusting that one or the other will work out. If we discover that neither will work — they’ll require too many changes for us to get done in time — then at that point we will go into full crisis mode looking at the lesser modern APIs (WePay, MangoPay) and last-ditch roll-your-own efforts, so that we can run payday #158 somehow or other on June 11 and get money in your bank or PayPal account on June 12 without interruption. That’s our goal.
Conclusion
If this doesn’t kill us, it will certainly make us stronger. At the least, we’ll be more compliant with financial regulations, which is intrinsically good since regulations encode best practices, and extrinsically good because we don’t want to get into trouble. Our aim is to provide a solid foundation for you, our users, and toward that end we are eager to comply with financial regulations in good faith.
As a Gratipay user this announcement is no doubt unsettling. In the spirit of openness we wanted to share this information with you as early as we could so that you’re not surprised in a worse way later on if some of the worse risks materialize.
Watch our Twitter feed and our blog for updates in the coming weeks as we work on this, and, as always, shoot us a (private) email or jump in on GitHub if you want to discuss further.
Thanks for using Gratipay! :-)
