Balanced is shutting down. The peer-to-peer marketplace payments platform announced on Friday (March 13) that it will stop taking payments on June 11, and has selected Stripe for customers who want to migrate to a new payments service with a minimum of hassle.
The 2011 startup isn't wasting any time -- Balanced has already set up a migration process that current customers can use to have Balanced start the creation of a Stripe account, which the customer will then have to activate, along with integrating Stripe's programming interface. Stripe will honor Balanced's pricing, the companies said.
"Despite the many challenges in the industry, we’re proud of how much we’ve been able to help marketplaces thrive over the last four years. Unfortunately, we haven’t been able to reach the escape velocity necessary to be a large, innovative, independent player in the payments space and have decided not to continue building Balanced," CEO Matin Tamizi wrote in the blog post announcing the shutdown. "Our full API and dashboard will be available over the next 90 days (until June 11, 2015), and support for issuing refunds, querying transactions, and fighting chargebacks will continue for the next nine months (until October 9, 2015)."
That lack of "escape velocity" largely comes down to a falloff in the number of customers, according to TechCrunch. Tamizi said in an interview that the shutdown will affect roughly 320 customers, a drop of about 30 percent from the nearly 450 customers Balanced claimed in January 2014. At that time, Balanced said its annual payments volume had passed $370 million and it was cutting its 2.9 percent rate for high-volume customers to as low as 1.9 percent, plus 30 cents per transaction.
That wasn't enough in the face of Stripe's expansion into peer-to-peer marketplace payments, even as Amazon Payments was getting out of that business. In January 2015, Kickstarter said it would replace Amazon with Stripe to process all transactions, which may have been the deal that sealed Balanced's fate.
Despite the fact that Balanced has paved the road for its customers to transition to Stripe, the deal is not an acquisition of either technology or staff, TechCrunch reported, adding that "there are no financial terms to this deal that are being disclosed."