This is exactly why regulations exist. MtGox should need to register as a Money Service Business (MSB) in the US and as a Money Transmitter in each state that they support. That needs to happen even if they're not a US company. The same applies to the EU, Australia, Canada, and many other countries that have regulations around this kind of activity.
The purpose of the regulations are to protect consumers for companies that are either malicious or incompetent.
The problem is that the licensing process is expensive, painful, and long. There should be better ways. Nonetheless, there's a reason why the exist.
One of the things to also consider is where you live and if you're effected by Seasonal Affective Disorder (SAD), which is a form of depression. It sounds like there's more going on than just your job, and you have to consider if your feeling about things have changed during the Winter.
It may be worth the effort of focusing on ways to improve your mood by exercising and spending time with friends to get you to a better state. That will let you think more clearly, have more energy for side projects, and seek out new employment or go out on your own.
There's usually a lot more going on with our mood than we initially think.
You can automate the DL verification process using Jumio. You hold your DL in front of your computer's camera, Jumio reads the info, and verifies the information. IIRC, Western Union uses Jumio for this very purpose.
You can also take money from a bank account using an account number and routing number. That's why Donald Knuth stopped sending out checks to pay bounties.[1]
> Is it another startup whose usefulness stems in a large part from the lack of ubiquitous free, same-day interbank payments between checking accounts in the US (unlike much of the rest of the developed world)?
I didn't list the payout time because it varies by bank. It is instant (24/7) when we're able to go through an ATM network like STAR or PULSE. We'll learn a lot more during the development.
We don't have any plans to offer interchange+ pricing. We found that would create more work for our customers. The predicability in pricing is part of the value that Balanced provides.
> We have an apartment near our San Mateo office that anyone can use when they’re in town. People tend to travel to San Mateo about once every 6 weeks on average.
This is one of the most important parts of the post IMHO. You have to see people at some point even if they work remotely or work occasionally from home. It's particularly helpful to coordinate travel schedules to get as many people in the office at one time no matter how small or large the company is.
> Generally, we hold to the offered rate even in the case that the card mix changes and becomes more expensive. In the case that the card mix becomes less expensive, we'll decrease the rate as our costs have changed and we can offer a better price. Our pricing is always based on the costs of the transactions, rather than volume alone.
This poses an interesting optimization problem. Given that model, a customer should email you at the beginning of every month asking you to (re)evaluate their rate given whatever period (trailing month? trailing 3 months?) you use to determine the card mix.
If the card mix has changed such that Stripe's cost has decreased, the customer would get a lower rate. If the card mix has not changed or has changed such that Stripe's cost has increased, the customer would maintain the same rate.
The above process could further be improved if the customer keeps track of their own card mix and only emails when favorable to do so. This could even be automated.
> There are downsides to focusing rates and adjusting them on volume alone. With the Balanced pricing matrix, if a merchant has a mediocre Q3 in volume, their pricing could increase for the highest volume quarter (Q4), even if Balanced's effective cost per transaction hasn't changed at all.
Yes. It's certainly not perfect. We used to have a tiered model where in each month the first $x was charged at some rate, the next $y would be charged at another rate, etc. It became difficult for customers to calculate their effective rate and project into the future. We'll continue try to improve based on the feedback we get from customers on our current model. Regardless, we'll publish any improvements in our pricing model and make it available to everyone.
I don't want to make this conversation about Balanced vs. Stripe. I asked my question because I was genuinely interested and wanted to see if there was something we could learn from each other. If you do have an internal formula, I encourage you to publish it. If the model is better than the one Balanced uses, it will allow us to learn and for everyone to improve. That is the nature of openness and what we're trying to accomplish.
This is dead on. Here's a few other things to keep in mind:
1. A Durbin Regulated Debit Card include any bank that has over $10B in deposits. That's most debits cards by volume.
2. We've been lucky in being able to negotiate with our processing banks (also called acquiring bank) to receive very favorable rates to pass on those savings. You have to factor in this cost in addition to the interchange defined by the card brands.
3. Amex is more expensive than most other cards, but Amex is also the only card brand that will negotiate on their interchange based on volume and other factors.
The state monitors transactions first for illegal activity under mechanisms like the Bank Secrecy Act (BSA). Any payments or financial services company follow Know Your Customer standards including running OFAC checks to ensure that the recipient is not a known terrorist.
> the expectations of the people who made a bet on us either with their money or their hard work that we feel we've let down, even as we know that most startups do not achieve this goal.
I'm sorry to hear that you feel like you've let people down. That's a terrible way to feel and live your life. Investors and advisors back you early on because they believe in you. Embracing that philosophy is liberating, and actually, allows you to take more risks and become more success (and happy) from my experience.
I'm sure they'll be supportive of your next venture.
Thank you for sharing your experience with everyone. I'm sure this wasn't an easy blog post to write.
> they always say you should eventually be embarrassed of the first version of your product.
Definitely! If you're not embarrassed of your first version, then you waited too long to launch.
You should try listing a product. The flow is actually pretty good, especially given the product indexing, tagging, and categorization that has to happen behind the scene.
The purpose of the regulations are to protect consumers for companies that are either malicious or incompetent.
The problem is that the licensing process is expensive, painful, and long. There should be better ways. Nonetheless, there's a reason why the exist.