We've made the difficult decision to no longer offer services to the small business market.
Back in April we launched Empower, and we decided to put the full weight of Brex towards building the best global payments platform for tech startups and larger companies. With that, we realized we couldn't do a great job serving the small business community at the same time. This has been an incredibly difficult decision for me and the team, but we believe small businesses deserve a partner that is entirely focused on them.
We know how changes in financial services can be disruptive – especially in a moment like now. We're doing all we can, and working with other financial service providers to make this transition as smooth as possible.
I don’t understand why you’re still not laying out the new criteria for being a Brex customer? It’s a wasted opportunity.
Whoever approved this communication squandered a chance to reframe what Brex is now about. Had the announcement said something like, “what’s the new criteria? $1m deposits … blah blah blah … we actually lose money on smaller customers … yadda yadda … it’s not sustainable”, you could have established yourself as transparent with a tough choice that you had to make. People can understand that.
Instead you post platitudes like “We’ve made the difficult decision” with nothing substantive and are establishing Brex as cagey, opaque, and unnecessarily defensive. Not a good look for your banks existing customers.
Now you’ve got a PR mess on your hands to clean up. Please consider a transparent postmortem on this blunder instead of doubling down on more corp PR speak.
After reading a few articles about how poorly Brex has handled this, I learned the Chief Communications Officer had 12 years of formative experience at Oracle (https://www.linkedin.com/in/karen-tillman-776a08/) and since worked at only large corps.
That would explain the heavy corp speak and complete lack of transparency. I don't expect them to budge or concede on any of this since the playbook is double-down, deny, and let it blow over. Blah.
I'm moving my funds out of Brex and will never bank with them. If you're in the same boat transferring founds out, be sure to leave a penny in your account and take a look at:
- https://www.mercury.com for small business banking. This is who I bank with now for small accounts and it works great. My only complaint is they don't yet have a credit card product, which makes purchasing online slightly riskier since debit disputes are harder than credit.
- https://www.airbase.com if you're looking for Brex Empower that doesn't have a track record of pulling the rug out from under people and need to control spend, etc. I've had experience running millions of dollars through Airbase and its great. No complaints. They're also great at responding to the needs of users.
The idea that this doesn't require face to face handling simply chills me to the bone. Is this how we're preparing for the worst economy in fifty years?
edit: PR used to begin with word of mouth. Just because we're online doesn't mean you can sh*post excuses and be done.
Brex founder here. Let me provide more context on what happened, and how this actually allows us to serve startups better.
In 2018, we launched Brex and started serving the fastest growing companies out there (DoorDash, Airtable, ScaleAI, Flexport, etc). As we expanded in 2020, we decided to start serving small businesses. We onboarded tens of thousands of traditional brick-and-mortar companies to Brex, along with startups. Over time, we realized that our startup customers were growing very fast, and needed BrexHQ to scale with them, but Brex didn’t work as well for larger companies.
Last year, we decided to go back to our core, and shift our resources to make sure startups could scale with Brex. However, we still had tens of thousands of small businesses with very different needs from fast-growing companies. By spreading ourselves too thin, we couldn’t serve either small businesses or startups well:
1) Small businesses didn’t get the products they needed (e.g. working capital solutions).
2) We had to degrade the white-glove level of service we offered to startups, in order to scale to tens of thousands of customers.
As we continued to scale Brex to serve startups (such as 70% of YC companies!), we realized we couldn’t do a great job serving small businesses at the same time. This led us to the painful decision to stop serving traditional small businesses. We decided to draw the line of who’s eligible as any customer who received any investment (accelerator, angel, VC, web3 token, etc).
This has been an incredibly difficult decision for the team, but it allows us to deeply focus on serving startups better. I wish we had been more transparent with the startup community about what this means to them – apologies for all the confusion.
If you believe we made a mistake offboarding you, please let us know at reopen@brex.com
I've transferred my funds to Mercury and have no plans to keep a Brex account open for current or future funded startups. The fact that you end your reply with "If you believe we made a mistake..." shows that Brex is still blaming the lowly SMB users and not taking responsibility for the problem. That's like apologizing to somebody by saying, "If you believe I offended you, I'm sorry".
I know you won't do anything about this, but you should seriously reconsider your Chief Communications Officer if you're serious about targeting startups (reasons at https://news.ycombinator.com/item?id=31780900). Assuming they're advising the customer communication for this strategy shift, you're getting terrible advice as evident by the poor response here and in the press. This was a huge opportunity to reframe Brex as being all about funded startups. Instead Brex is coming across as arrogant with no concern for customers unless they have boatloads of money and fit into the strategy. It's very unbecoming to startups and sounds like how Oracle would communicate to the world.
> We're doing all we can, and working with other financial service providers to make this transition as smooth as possible.
The biggest thing for us would be if you could support Plaid's Identity product by returning names and emails when someone links a Brex account with Plaid.
When someone links an account using Plaid, having this data available means we can compare that to the names/emails we have on file and have verified. If it's a match, this makes it _dramatically_ less likely someone is trying to commit ACH fraud against a Brex customer.
This makes it safer for us to offer higher ACH pull limits to that customer. Even for customers who never switch away from Brex, this would significantly increase protection from ACH fraud.
I just wanted to say that I absolutely understand why you prefer users to use Plaid's identity product (the startup I work at does this as well), but I HATE that it's becoming the standard way to link checking accounts. Both from a data sharing perspective, and from a training users to enter login information into random forms perspective.
There has got to be a better way for us to accomplish this.
Plaid is a menace. My checking account was synced on Venmo just fine using the small transfer method for years until plaid was introduced. I redid the old school verification 3 times before giving up and linking via Chase. I changed the password afterwards but of course that unlinked me again. Can’t wait until some regulatory agency comes after them.
It really annoys me how some service/startup gets build around the large "infrastructure" (in a broader sense) deficiencies in the US. Because of the size of the US market and the amount of VC funding they then become big and move into markets that have had perfectly functioning solutions (like the EU in this case). Because they are so flush with cash (and much conversation/advertising online is very US centric) they then become dominant even in markets which had a perfectly functioning system that never needed they solution.
Uber is an example of this (taxis had issues in Europe/Australia as well, but by far not as problematic)
> There has got to be a better way for us to accomplish this.
One path forward is Oauth, which several major institutions use on Plaid (Capital One, Wells, Chase are ones I know of).
This definitely solves “entering login information into random forms”.
I’m pretty sure I have seen these institutions offer you some control over what data you share when you link, but it was minimal control, and didn’t work well. Ideally that would be more fleshed out.
You’d still be sharing balance and transaction data with Plaid though, that part isn’t solved by Oauth. I think to solve that you need to have a European style standard banking API that makes direct bank-to-bank data sharing tenable?
There should be a law for this. The EU as an open banking API law, that requires banks to make this data available electronically over an API.
The US needs an open banking law. This should not be an optional feature for banks to offer. It should be an absolute requirement.
I think it's insane to enter your credentials into Plaid. Almost every banking agreement I've ever seen disclaims liability if your account is breached because you shared your password. So, if you share your password with Plaid, and Plaid is breached, and someone uses your banking credentials to drain your account, I think a bank could wash their hands of it and walk away in that situation.
I'm sure the Plaid engineers are great, and that their data is stored securely (and maybe they don't store the password at all in there systems). But I'm not willing to bet my entire bank account on them being perfect.
Plaid is almost 10 years old and I think there are probably several verbatim comments on HN since the introduction of Plaid. Unfortunately I don't think we will ever see a such a law; the landscape has changed from 10 years ago and:
1. Plaid has been pretty much been blessed by the largest player in the space (the , now blocked, acquisition from Visa).
2. The banks are glad to outsource development of banking apis to one single customer. Even CapitalOne who seemed horrified at the integration built an Oauth endpoint.
3. The queue of banking regulations is a mile long and is deeply politically controversial among those who vote.
4. Our geriatrics in congress will never see this as an
important issue.
Oh, yes, I would absolutely never use Plaid, or any service that requires it in the meantime.
But, there are many services that should exist, that could be safely used, if such an API mandate existed.
I actually think it’s a matter of time. Eventually the current state of affairs will lead to a crisis. Someone operating like Plaid (a centralized nexus of banking passwords) will be breached, funds will be drained, and banks will shrug.
At that point, the API law becomes much more likely. Banking regulations have a way of moving very slowly until a crisis erupts.
Another path is, once most of the bigger banks develop their own APIs, they will probably push for the regulation as a path to making it harder for smaller banks to compete.
> if you share your password with Plaid, and Plaid is breached, and someone uses your banking credentials to drain your account, I think a bank could wash their hands of it and walk away in that situation.
is "Plaid is breached" necessary? Or is it enough for bank to be aware that you used Plaid?
I don’t know, I’m not a lawyer, just a concerned bank customer that read my TOS.
My guess would be that your bank account being compromised would need to flow in some way from you sharing your password. But, it might be a matter of “who has the resources to make a claim in court”, which could be a challenge for most people if they just lost their bank account (hell, it would be hard for most people even with access to their savings)
From what I remember from reading my bank contract: they claim that any password sharing and blatantly insecure behavior waive bank responsibility.
It may not be enforceable, but in my case any use of Plaid or Plaid-like tool would allow bank to claim that they are no longer responsible for any fraud.
(for reference - I am from Poland, never encountered any nonscam asking me for my bank account, though banks have different variety of problems)
[I work at Plaid] Not to get into too much of this, but the Consumer Financial Protection Bureau has issued guidance that banks are still required to comply with the consumer protection measures provided by Reg E (and thus cannot fully disclaim liability) even when a fraudulent transfer is the result of password sharing. More info at https://www.consumerfinance.gov/compliance/compliance-resour...
Though this is still obviously not a replacement for open banking and would I still love open banking laws in the US (and hopefully better implemented / constructed than the open banking laws in Europe!)
I don't see anything that would extend the coverage to a service that is providing a read-only view into the account, or anything that mentions password sharing. I _think_ I could see what you're describing in maybe the description of the transitive nature of Regulation E to cover "non-bank payment providers", but I don't see anything that would protect me if I shared my bank password with Mint via Plaid?
I'd love to know more, and as a lay person I'm having a hard time working my way through all the language of Regulation E.
Sure. The most relevant section would be the "Error Resolution: Unauthorized EFTs" FAQ section in the link in my previous post, especially FAQs 4-8.
(Also, just to clarify how Plaid works, Plaid does not share account credentials with Plaid's customers, so you wouldn't be sharing your password with Mint via Plaid. Instead, Plaid provides token-based access to data via an API.)
After looking at those answers and reviewing the relevant parts of Regulation E that it cites, I do feel like the regulation pretty-comprehensively disallows banks to impose liability on the consumer for sharing their password. Answer 8 especially that notes that no waiver of Regulation E is allowed makes me feel more comfortable.
I'd still support an open-banking API law, but your citations here have really turned down the urgency for me on that issue.
(And, yep I'm familiar that Plaid does not share the password beyond itself and the relevant bank it's authenticating with)
Iirc, with our current partner bank Evolve + technology provider Synapse, ACHs and wires have “Synapse” as the sender name on a certain field, instead of your business name.
This is (as far as I understand) wrong. Fortunately
it usually doesn’t break anything, but Circle is more strict about this saying the business name.
We have a new partner bank we just launched where we have full control of the ACH stack, where we’ve resolved this. Also trying to fix the issue with the existing partner.
Caveat that I didn’t check this answer with anyone, since it’s early.
We use to be with Synapse and Evolve too - have thankfully moved on ;) We went through the same pain with Synapse that it's their name and not the customer's name on the wire. I thought at Mercury's scale you could get them to change this by now.
Mercury rejected our LLC when we applied there yesterday so not sure where to go now (and no idea why we were rejected). Is there any reason not to go with Bluevine?
Does this sound correct to you / if so can you remedy it with Rhode Island? (edit: our onboarding team says you specifically want a Certificate of Good Standing from the state)
That said, this should have been communicated as a clear rejection reason—we'll work on that.
Yeah we are waiting on accountant to finish taxes (which are on extension) for 2021 so we can submit and get a statement of good standing with RI so we can renew our registration. Mail forwarding failed to forward our annual statement document for 2021 so we won't be in good standing with RI until that happens. I got in touch with accountant today to see if they can escelate but they are still a few weeks out.
Every.io sounds interesting. Except I have never heard of the company, there are misspellings on the webiste and the address is a mail drop in San Francisco. And nobody else ever heard of the company with zero links or information anywhere online. So they pay 4% APY but its a company nobody ever heard of.
1) If I were doing due diligence on a vendor, and ran across something like this, I wouldn't buy from them. It's unlikely to come up (I've never done due diligence on a CEO), but if I learned a CEO had pulled a stunt like this, I wouldn't buy from a new company.
2) Actions like this bias my judgements to the entire buy vs. build decision, and the SaaS space. My experience is that each time a service provider pulls something like this, the cost is higher than any net benefit from having worked with that provider.
There are exceptions. There are vendors with long track-records of stability. I happily use AWS, and would happily use Azure. But I don't do business with Google because of a history of stunts like this (several affecting me), and I avoid small startups for anything business-critical for the same reason.
In finance, stability is especially key.
In the same way as firing employees impacts the morale of existing and potential employees, firing customers does the same.
I can't stand comments like this, pointlessly berating the CEO when you're not even a client. This is a forum for startups: startups frequently pivot in their search for product market fit. What do you expect him to do, have the company go under to maintain an unprofitable business segment? Have a layoff to cut costs? Who would that benefit?
Guess what: if every time a CEO writes a comment on this forum, angry-for-no-reason people show up to hurl vitriol at them, then eventually they will stop showing up to write comments. Stop it.
This is criticism and advice. It is not this forum's job to tell people that their ideas are good and their business models are sound when they arent. It seems like the claim is that it is a worse idea than you think to fire your customers.
That's the exact claim. It's not a pure calculation on individual customer ROI. In most cases, grandfathering in existing customers (keeping in mind I'm not one of them for Brex, so have no axe to grind) is simply good business. The reputational benefit far outweighs the cost.
The flip side is that if you are evaluating vendors, this kind of stability is worth looking at:
- Do they have a track record of customer-disruptive pivots?
- Are they structured (e.g. have revenues or funding) to be around for the long-term? Or might they disappear overnight, taking your business down with them?
- Are you being subsidized for growth? Do you expect for this to flip to being a cash cow at some point?
The wisdom when I was younger was "No one got fired for buying IBM." It annoyed me at the time, but having done a few ventures, I understand that wisdom now. It takes 10-20 years for a unicorn to exit. If you have a dozen vendors who are positioned such that a pivot on their side can cripple your business, and those vendors have a mean time between such pivots of 5 years, you won't last long.
With both employees and vendors, a good thing to look at is history of value-creation. If an employee created value everywhere they've worked, they're probably a good hire. If they've burned value at each place they've been, they're probably a bad hire.
I find it very useful to hear why people choose not to use my products, I find there is some selection bias in the opinions of people who are already customers.
There was valid points made that were forward but certainly didn’t strike me as angry. And I agree with the sentiment. I am weary of more and more startups and companies like Google these days. I can’t rely on a lot of them.
AKA they lose money on smaller customers to customer support requests and most likely wire transfer fees since they offer wire tranfers for free. They almost definitely lost money on my LLC I bet they only made $5 in interest after a year and probably spent $100s investigating my various customer support requests. Plus I made several thousand off of their rewards program. So yeah, bummer, but it makes sense. It's too bad I'd be willing to pay like $100/month to keep my account going.
They make money on the interchange too. When you're spending on your card, they're making money. At least for their credit cards, no idea how their cash/banking product works.
Source: We're a neobank too (and we use Brex cards for company purchases)
You hear that? That's the sound of my eyes rolling. Dude, stop saying cringe shit like "we made the difficult decision." You dumped your least profitable customers in the gutter.
> We know how changes in financial services can be disruptive – especially in a moment like now. We're doing all we can
Like giving people two months notice?
Seems like a perfectly calculated move: be a jerk to a small number of small-fry customers so the rest of your small-fry customers freak out and leave on their own accord and have much less negative stuff to say about you.
You're going to kick out some people that end up succeeding big. They will never forget what you did to them, and they will go out of their way to tell others about it.
You should have just changed the bennies for accounts under a certain size, instead of booting accounts and making even a small number of people enemies.
How do you distinguish between a tech startup and small business?
Not to doxx anyone but I'm familiar enough with the financials of several businesses that would call themselves either depending on the context, and the only meaningful distinction I can think of is venture funding
Those are orthogonal classifications. Startup is an early stage company, bootstrapping income/revenue flows. Small business is well... small, usually in terms of money flows and number of employees.
In contemporary usage "tech startup" usually means an early stage company expected to relatively quickly grow their money flows and have high opex-to-capex and incoming-to-outgoing transaction ratios.
As someone who got dumped when Crashplan decided to no longer offer service to individual users, regardless of the business realities, this is a universally shitty thing to do to your supporters. Why should anyone do business with you if you might pivot away from them (on such short notice, no less) in the future?
If the estimated total net profit % per user is low single digits, keep them like "white elephants" or move them somewhere else where they can be serviced with continuity.
Pulling the rug out from under customers with little or no warning is a terrible practice.
I have an LLC on Brex, but haven't gotten an email yet. I'm not sure if that means if I'm in the clear or if the email just hasn't rolled out yet.
Would be great if you could send an email to _all_ customers, including the ones who weren't affected as a reassurance, so we could either rest in peace or get the migration started ASAP.
That is ridiculous. I think closing down someone's account especially if there is still money in it warrants registered mail (even email is not sufficient) and definitely not a note on the web page.
They were marketing hard at one of the coworking spaces I was at which was full of tiny companies that didn’t make
Much revenue . Couldn’t they figure out the math doesn’t work out prior to doing all this work and then backtracking ?
I’m guessing they were just chasing vanity metrics for a funding round
So current costs vs. revenue mean you can't service your current customer base? Specifically, the customer base that punched the growth numbers to achieve many millions in funding?
I would guess they probably found that the "small business" segment of their customers ended up contributing to a disproportional percentage of fraud, support requests, etc, to the point they were net negative?
Though I still wonder if they considered just closing off to new customers instead of closing accounts of existing ones, since the fact that the latter would blow up in a nasty PR nightmare like this and do massive damage to their brand was pretty foreseeable.
Charitably for Brex, if I am to guess the decision was not taken lightly, it possible the company cannot raise as much as it hoped, is running out of runway and has to cut costs and this is how its doing it - by downsizing, possibly layoffs in post-Aug
They've raised $1.5 billion in 12 rounds. I don't think this decision is due to a lack of funding; in fact, I think so much funding has significantly encouraged it. Unit economics and customer acquisition costs/lifetime total value become a lot more important when you're leveraged, doubly so with a recession looming.
As a startup CEO that uses Brex and hasn’t been kicked off I have to say that I’m strongly considering self-evicting. What a shitty way to handle this.
The situation reads like a snob club rather than a business service. Since there's plenty of fish in the sea, I'd throw them back and find one that was more professional and less mercurial (pun intended).
Perhaps they know they can’t offer a cost that makes sense / is competitive for those customers and would rather devote resources to a product that is competitive?
Why does the cost have to be competitive? Price it at a level that covers all costs. If the price is uncompetitive, 99% of users will not take it, however, that 1% that _really_ need to continue using Brex (for whatever tail reason) can continue to until they're ready to migrate.
It’s always bette for your reputation to cut a product entirely, than to come back and say it’s $1000 per support ticket when support tickets were previously free.
Because you want to make a product that doesn't look silly / is worth all the effort to maintain it.
Having an noncompetitive product means fewer and fewer customers so the cost keeps going up per customer.
It also looks really bad. I know when I'm shopping around if I see sticker shock for some service even when it isn't exactly what I"m buying that is a big turn off for me as I assume that's how they price things ...
That only works out, when price matches customer expectations. Aren't you ever been position, where customer insist to get price offer for something ridiculous? Those clients always act offended, when you finally give them price. Even when you previously are communicating out that this is going to be really unreasonable, no point for calculating exact offer.
> What were your reasons for attempting to sell your services to smaller businesses in the first place?
People don't change banks very often - a lot of banks offer child and student accounts because they know a decent % of people who bank with them at age 15 will bank with them at age 35.
Perhaps their intention was to get in early at 3-person companies that were on their way to becoming 300-employee companies; but they actually found a bunch of 3-person businesses like barber shops and food trucks signed up.
They were trying to execute the principles in “the innovators dilemma” by acquiring customers while they are small and helping those businesses grow. I speculate that the sudden pivot came from the VC investors not the founders. First the drive for profitability most likely stemmed from emerging competition like ramp, and the now with growth stocks losing momentum and the credit market drying up, the VCs have more leverage to run things the way they want.
> Back in April we launched Empower, and we decided to put the full weight of Brex towards building the best global payments platform for tech startups and larger companies.
The "larger companies" part is surprising to me. I would have expected that larger companies have already figured out good ways to handle global payments. Global commerce by large companies has been common for decades and so I'd expect there would be large, efficient, well established services supporting that.
It is smaller companies being able to participate in global commerce that is still fairly new, and I'd expect that many of the older global payment services that served the larger company's global payment needs aren't designed to scale down for smaller customers.
Thus I'd expect that global payments for smaller companies is where the opportunity lies.
I was in the middle of transitioning my existing account to Brex. I have many things to do and so this lower on my priority list. I'm glad I was only in the beginning of the transition and that I hadn't moved over completely. While I wasted a few hours of my time, nothing near what I would have wasted if you had pulled this on me later.
> This has been an incredibly difficult decision for me
Could you elaborate on the “incredibly difficult” phrase? What pain did you go through to make this decision? Do you mean this is a risky move for you?
Your “partner” bank ratcheted account minimums upward. It’s no longer profitable in a modern inflation scenario to service the accounts you built your business on.
We’ve put $millions through Brex cash/cards and will almost certainly leave after reading this. This doesn’t affect us (I think?) but that they’d do something like this in this way is a breach of trust that signals bigger problems down the line. What is “Empower” and why would I believe they won’t sunset the current Brex offering to push some upmarket sales nonsense on us as it that new thing becomes the focus?
We had kind of outgrown Brex anyway, but this is sad to see. What really irks me here is that I know my first company, a bootstrapped e-commerce thing that was a healthy “small business” would have been axed by this, but the current one is big enough that they wouldn’t want to lose us. Just doesn’t sit right with me.
I appreciate how tough this decision probably was, but I hope they properly modeled who else they’d lose via loss of faith, like us.
Brex cash is functionally a bank account. Department-specific Brex cards are useful and it integrated well.
Our “real” bank has such a clunky interface that we started using Brex cash because it was a little easier, and over time drifted more to that account.
Not surprised by any of this. Feels like it comes from the top, culturally.
I had a terrible experience "onboarding" with Brex last year. They actually "approved" my bootstrapped startup and sent me a physical card only to rescind it a shortly thereafter, because--even though we met the funding minimum--it wasn't "professionally invested" on further review. Bootstrapping apparently required a $1MM minimum.
Here's what they told me:
"While being professionally invested is not a requirement for the Brex card with monthly payments, without professional investment, the minimum cash balance requirement shown in connected accounts is $1mm. If you're able to provide proof of XXXXX's professional investment, the minimum cash balance requirement shown in connected accounts is $50k."
Left a really bitter taste in my mouth. Won't ever use them.
Indeed, Mercury has been phenomenal for us too. It's painful to use other banks now. How they've executed so quickly and competently in a tricky space is quite something to watch.
But the thought of them pulling a Brex-like move might now keep me awake at night... hopefully they would just add a monthly fee on before reaching that point.
Our unit economics are strong for all businesses, so we don't anticipate ever having to do something like this.
Banking is our primary focus, not an add-on feature, and we invest significantly on the product teams that enable strong unit economics in banking for the long run, like partner integrations, support experience, and onboarding/risk.
We used SVB at my previous startup. Somewhat ironically, their UX is SUPER dated and a bit kludgy (been a year since I've checked, though) and their fees are high, BUT they're high touch and good to be in with strategically (especially when it comes to debt financing).
I don't know if I'd suggest them early on when bootstrapped, but definitely worth a gander once larger or VC-backed.
Mercury's UX is sexy AF and enjoyable to use. They did have an internal screw-up with our initial account setup due to a mix-up with their partner bank (Evolve Bank & Trust), but their customer support is top notch and got it resolved quickly. They also have some nice promotional deals. In comparison to SVB, though, they're not nearly as high touch and also don't have physical locations.
I could care less about UX. If it looked like Larry Wall's personal site, but functioned well and was reliable (tech and relationships), I'd pick them every time.
If it ain't broke, don't break it. ;)
PS: SVB's site has always looked a bit behind the times like that they never cared enough to make it look glitzy because functionality and communication were considered first. Slick websites also give a captological impression of overcompensating, so perhaps decompensating is an important contrary corollary for basic utility services.
"functioned well and was reliable" _is_ UX. Having a pretty site might improve the user experience, but being broken and unreliable will have a far bigger impact.
If that's what most people thought of when the thought of UX, even here, then the phrase "the UX is dated" wouldn't mean anything. "The reliability is dated" is not a sentence that anyone says.
It's almost sort of endearing, but not actually. The fact that they use SMS-based 2FA (at least through 2021) is a travesty and a bit concerning, though.
Edit: since I can't reply to response below (I think due to thread depth topping out). To clarify: they ONLY support SMS-based 2FA. No TOTP. Sure, other services offer SMS as well, but you wouldn't want to use that for securing any serious amounts of money (millions of dollars).
Yes, well unfortunately 2FA and banking and investing doesn't seem to go well together in the US. These companies move at a glacial place.
Examples with huge market cap and no TOTP support (afaik): Vanguard ($6T+ managed), Chase Bank ($3T), and every botique investment firm I have dealt with.
I personally don't count "we email you a secret code" as 2FA. Do other people?? I mean, sure my email might be secured with real 2FA, but it's just my gut reaction that this isn't nearly as good.
When you can't reply to a comment it's usually because it's brand new, to prevent flame wars. If you click on the "timestamp" (where it says "0 minutes ago") you'll be able to reply there regardless of comment age.
You mean it's not optimised for a phone screen even when I'm using a pc so I can see a useful amount of information on one screen. And has actual options I need rather than looking good?
We started using SVB when we expected to raise a sizable seed round which never happened. It's been over a year that we've been bootstrapping with them and we're quite happy with them. Support is great and I don't think they care that we're smaller and bootstrapping. Of course our needs aren't that big so we don't need a lot of support - but when we do the response is fast and personal.
My read on SVBs strategy is - if there is potential for this company to become large VC then it's better to be kind to them even before that point.
Yeah, this is scary AF because we are getting ready to raise as we get closer to the end of our runway and now I'm looking over my shoulder wondering if Brex is going to kick us out because we don't have enough cash in the bank.
Customer trust is hard to earn (I loved their product!) but so, so easy to lose.
If you deposit checks, make sure SVB doesn't make it too much of a hassle. I don't know why but a prior employer banks at SVB and they have a real hard time getting my COBRA checks deposited. Sometimes, I'll have 4-5 months of COBRA checks deposited at once. I have a business account with plain old Chase and as long as the funds are in USD, I can deposit via a mobile app. Nobody really wants to deal with checks of course but if you do have to...
In Vimeo’s case the decision was probably motivated more by cost. It’s not that they can’t compete with YouTube on product, but economics of YouTube just aren’t that great if you aren’t Google.
LOL. The shitty version of Youtube has always been Youtube. If you were making an amateur video Youtube was plenty. If you were an auteur and wanted to be above the fray you hosted it on Vimeo. Sadly, Vimeo has gone the corporate video route while Youtube is leveraging Google.
Vimeo knew their target but sadly that market isn't large enough to pay the bills.
I've been using Brex for a few years. I didn't ask for much beyond an Internet bank into which Stripe and clients could deposit income, and from which I could make payments.
If they had said, "Below a certain balance, we'll need to charge you a fee," I likely would have paid it. The annoyance factor of switching banks, payment from my various vendors, etc., is not small.
Instead, I got a completely out-of-the-blue e-mail telling me that I have about two months to switch banks, and that there's nothing to talk about.
I'll echo those who wrote that if this was, as the CEO wrote, "an incredibly difficult decision for me and the team," it should have been given more thought than a "We're kicking you off -- good riddance" message.
I'm disappointed as a customer. But I'm also disappointed as a person in the tech space, where such poor behavior toward your customers is considered acceptable. More transparency and empathy could have turned this from an infuriating PR mess to a frustrating-but-understandable pivot by a fintech startup.
I came here to say this... maybe consider a rebrand/rename? I don't suggest that lightly, but their name has some serious negative (for some people) connotations (not for me... it's politics, which I frankly just don't care about, life is too short). I instantly assumed their business was tied to some political allegiance with EU/Brexit finance/payments, which alone made me almost not click into the article. I read the article and I'm confused why they are called "Brex". Odd choice. For a sizeable section of the market, they might as well name themselves NaZEE (not that I agree necessarily). Just being honest with how I see it. They really aren't doing themselves any favours with the current name.
I don't disagree that they could have started with a better name, but I think that ship has sailed years ago when they covered SF with the name on billboards, including one that literally says:
For HN'ers outside the UK who might be put off by the Godwin above: People here really do have strong opinions about Brexit, one way or another. It has been a central part of the news for many years now, and it has increasingly real implications for this country's future. I (also) don't want to delve into the political arguments, but to give you an idea of what's at stake, a Brexit-induced restart of the Troubles in NI is now looking more likely than it has for decades.
The point I'm trying to make here is that it's just not a topic that you can have a casual opinion on. Against that backdrop, using the term as a whimsical joke feels so profoundly distasteful that a lot of people here would probably ignore the business entirely.
You should definitely check us out https://www.rebanknow.com/ if you're looking for an alternative. We cater specifically for small businesses and we're ready to help you switch over.
I've founded many companies of many sizes, from 0 to 85 employees, over the last 25 years.
I've used many business banks in many countries. (Wells, Citi, HSBC, ING, BoA, BNZ, OCBC, DBS, Wise, even private banks.)
But I've never been so impressed and happy with my bank as I am with Mercury.
Mercury continues to impress me, even though right now I'm a super-small-fry, their service, features, and attention are top-notch. I love them. I'm a Mercury fan.
I believe they are doing things right now that do not scale so that they can get reviews like yours. It is a strategy to create loyal customers at the beginning.
I'm not sure but I think PG has talked about this strategy.
Unless that business is in crypto, in which case you'll freeze their account. This happened to us, which halted our payroll and hurt us. We had to scramble to find an alternative, which is now Brex.
To Mercury's credit, their staff was responsive the entire time in helping us transition. But the fact that they couldn't give an ETA on when things would resolve with their partner bank was distressing for us.
I do not think it is fair to complain about regulated banking when you yourself deliberately do stuff with crypto. Even more so when you mention that this particular institution was helpful with resolution out of the hole you dug yourself into.
I don't want to start a debate on how crypto should be treated, but currently it is treated the way it is.
+1 to Mercury. And from the what I’ve seen from other founders / CEO using you all, I’m not alone!
Incredibly easy setup, great UI/UX and no nickeling and diming with fees of any kind. Makes me wonder what are your unit economics like as you obviously will be making losses from the very smallest of customers?
Mercury is awesome! Not sure if this is right venue for feedback, but if only you could offer ACH without Plaid (which feels like a huge invasion of privacy), it would be even more awesome. Wire transfers cost 20$ each, depositing by check feels like the 1990s and takes time to clear.
I assume they will support FedNow instant payments as they’re rolled out over the next 18-24 months. Those payments cost the financial services provider 5 cents per transaction up to between $100k and $500k (depending on configuration with the Fed). They settle immediately 24/7/365. Wires via FedWire will be reserved for amounts between $500k and $50M, which doesn’t sound like a $20 fee would be unreasonable for to account for human review of the transfer.
Edit: I didn’t even know Mercury doesn’t charge for sending wires. As a customer, I’m delighted.
To clarify, when rawtxapp said "Wire transfers cost 20$ each", they probably mean wiring _to_ Mercury from their bank costs $20. Mercury doesn't charge for sending wires.
The reason they're mentioning the 3rd party bank fees is they'd prefer to use ACH pull to have Mercury take the money directly from their existing bank account (similar to how your gym or electric company might do). We do offer this, but only if you use a service called Plaid to link your third party bank account.
This involves typing your bank's username/password/2FA into a Plaid iframe on our website, which confirms it with the third party bank. If you've used Venmo, that's using Plaid under the hood to link your bank account.
Ok, all that said, my question for rawtxapp: are you mostly asking for us to verify 3rd party bank accounts via microdeposit instead? I agree it's less privacy invasive, but, definitely pretty slow and 1990s like you said about checks. I'm not sure of the security either.
I'm somewhat hoping it's less of an issue as more banks move to doing OAuth in Plaid, instead of sharing passwords. Capital One, Wells Fargo, and Chase do this now (we should really move to doing it too).
> are you mostly asking for us to verify 3rd party bank accounts via microdeposit instead?
Yes, I'm fine waiting a couple days for the initial setup if it means I don't have to let Plaid see every single transaction coming in and out of my account (and see my password in plaintext and all that). If you'd support USDC deposits, that would be even better (instant settlement with no reversibility, so no risk to you), but I'm guessing that might be a stretch. Regardless, Mercury is a very nice service as is, thank you!
FWIW I always configure my bank to bank transfers with micro deposits - I am very uncomfortable giving plaid my credentials. It takes a couple days which is lame but feels much safer.
So if I manage to catch your ear, can I ask if there are plans to allow earlier ACH (or even better, RTP) in the future? It's a mild annoyance that even scheduled ACH transactions don't go out until the last ACH window of the day - especially when I'm paying myself! :)
It's definitely not a deal breaker, but it's the kind of thing I'd be willing to actually spend a few cents on to cover the transaction costs - earlier settlement means better Fridays for me!
Hey abofh! I lead the engineering team responsible for payments at Mercury. We're definitely looking at adding better and faster payment rails in the future, but I think that your scheduled ACHs should go out in the first ACH window right now. It's possible that your receiving bank isn't posting them until later in the day, but we send those first thing in the morning when pre-scheduled. If you want to email me, I'm happy to double check that for you. jake at mercury dot com
For someone facing issues like this, you can often use another bank as an “intermediary” especially for personal accounts. Pull from your spendy bank using TD Ameritrade and then push it into Mercury.
Maybe I am displaying my ignorance for banking costs for larger business, but I have lived across NZ, AU and multiple EU countries and I never recall having paid for wire transfers neither for private nor small business accounts. Is this common even outside the US or a US only thing? $20 per wire transfer sounds insane to me. How do they justify that cost?
While it's great to maintain good enough unit economics to not have to pull stunts like this one, it's not necessarily always a plus from a customer perspective.
Comparing Mercury and Brex/Ramp specifically, Mercury is notably missing rewards on transactions, while Ramp has unlimited 1.5% cashback, and Brex has a bunch of multipliers ranging from 7x to 1x points.
If I have access to all of the options above, it would be financially irresponsible for me to spend through Mercury.
Would like to see Mercury get more competitive here even at the cost of less cushy unit economics.
EDIT: Some of the replies here seem to think Brex is shutting down entirely? Please read the actual article and the founder response above. They're only shutting down operations for small businesses, presumably because that's the only segment that doesn't have sustainable unit economics. % rewards on spend from interchange revenue has been around for decades. The model works, given the right set of customers and credit risk profiles.
I'd guess that a factor in Brex's shutdown was that these rewards are unsustainable. That seems like a good reason for Mercury not to adopt the same practices.
That's totally understandable, for the small business segment.
I was just saying that for a VC-backed tech startup, the lack of rewards is a huge turn-off, compared to some of the other options for spending available to us.
I don’t know of many banks that offer high reward debit cards. IMO Mercury has almost perfected the banking experience, and I am perfectly happy with that.
If I want a high-reward card I’ll get an Amex Platinum (a credit/charge card) and stick with Mercury as my bank.
That's a perfectly valid choice! FWIW, I actually do like Mercury's UX marginally better than Brex.
I would just prefer to have my banking and spending in 1 place, and if I did that with Mercury, I'd be sacrificing 1%+ rewards, which I would not consider a financially responsible option when Brex exists and has a good enough banking experience.
Wouldn't it be nicer for everybody if there were more options that had both a great banking experience and credit-level rewards that all competed for our business? That's all I was trying to encourage with my feedback, but the fanboyism in this thread has proved to be too strong for that message to get through.
Personally I would much prefer to keep my banking (cash storage) separate from my credit. To me, it is nice to have a barrier between the two. This way, your credit provider won't randomly decide to shut you out of your bank because you're too small!
Your feedback was literally, "I don't like you because you're not doing the thing that <company that's kicking everybody to the curb> is doing." Ironic is exactly the word for your feedback.
> Brex has a bunch of multipliers ranging from 7x to 1x points.
sounds like Brex has been losing money on unit economics while making it up on volume, and now with VC money tightening ...
Wrt. small business vs. startup - i'd guess that any company older than 3-5 years which hasn't become big enough (in spending or revenue) and not showing fast growth can be considered a small business :)
If I had to guess, I'd say the biggest contributor to poor unit economics for small business vs startups is credit losses.
Startups usually have tons of cash in the bank to underwrite against, which made them actually very safe to lend to, unintuitively enough (that underwriting model was Brex's original innovation, remember?).
Whereas small businesses usually don't, but still need a reasonable credit limit to spend with, so they end up having to underwrite using traditional data sources like credit scores and whatnot, and they probably haven't been able to develop a sophisticated enough model quickly enough to curb losses, and the recession certainly isn't going to make things any easier.
So, anticipating further accelerated credit losses down the line, this is them throwing in the towel on that whole experiment.
So customers have less than 2 months to find new banking partners, migrate their data, inform their partners about banking changes, etc...
This is one reason why I'm avoiding all fintech/startup/neo banks in the future. My most solid experience was with a top 5 US bank. They have a shitty customer service and a plethora of offers; but my direct deposits go faster, I don't get pestered over 5 figures amount going in/out because AML and they were able to accommodate some particular needs (that no neo fintech will do, since they lump all customers into one basket).
If anyone wants to bank in the future (both for personal/business), here are the banks I'd suggest: Citi, Chase, BoA and WellsFargo.
When I moved across state lines Wells Fargo required me to go back and close my account in my previous state and open a new one in my new state. Left and never went bank. When BoA moved from San Fran to the South and started doing questionable practices it was time to move. US Bank has been amazing, and my immigrant friends all say US Bank has overcome hurdles/issues that Chase, BoA, and WellsFargo refused to help with (often just refusing to take them as customers). When my mother died, US Bank was amazing with protecting her estate from legal BS, to the point that they ended up going to court and paying out of their pocket to do what was right (and this was not a large estate to profit them). Seriously never seen a bank (or large corporation) so willing to see/accommodate individuals and their situations instead of just providing cookie cutter services that if you didn't fit you were excluded. At this cynical point in society I didn't think a bank could impress me, but they have.
It was state dependant, but also only had to be done with our Wells Fargo accounts, meaning it was do to Wells Fargo's choices not specifically state requirements.
I’ve used us bank for an auto loan and they were super helpful when I sold it. I honestly get anxiety and social lock up when dealing with financial stuff (it’s all so much bullshit after the basic accounting is done) and they were really chill about the whole thing
US Bank is the 8th largest bank. I'm surprised with your experience with Wells Fargo since they didn't require that for my sister. Maybe they changed rules or it was a particular state?
How good is the online/mobile app access for US Bank?
It was because of the state we moved to, but we only had to do it for our Wells Fargo account.
Not a mobile app power user but it does everything expected (deposit checks from phone, balance info), and I get large transfers in (trust and business) through Zelle and send to my son through Zelle instantly in the app.
Not exactly the same but I did taxes one year on Credit Karma. A few years pass and I'm buying a house, lenders need tax returns. Credit Karma tax was sold off, support gets back to me after two days saying they can't help me at all getting the old return filed with them. Fuck this, never again.
Turns out it was easy to get the return from the IRS directly, but this turned me off from introducing "hip" tech into my financial life ever again.
It is good practice to save PDF copies of your tax returns so this way you don’t need to request them. I would recommend making a habit of this moving forward in general.
I desperately want to use a credit union for all of the presumptions you're making, however:
- I've moved to 12 in 15 years across 3 countries and 8 states. Credit unions are terrible for this.
- The non-profit credit union I used for my car loan was quite possibly the worst and most painful technology interfacing experience I've ever encountered.
- There are all sorts of out of state and international benefits by using a national provider - for example, I regularly send international wires for an international STR property I own.
- You simply can't beat big banks for their CC rewards.
FYI - I've used BoA, WF and Chase blows them all out of the water.
As someone who has used both, I whole-heartedly believe that anyone who would put some marginal financial benefits of a CU over the ease of use, consistency and convenience of a big corporate bank is insane. So it appears we’re at an impasse.
The first credit union I belonged to, my balance was rarely four digits, more commonly 2-3. The branch assistant manager was absolutely amazing. She'd do me all sorts of favors, like insta-clearing parts of checks I was cashing.
Any major bank is full of pencil-necks who have the corporate rule book memorized and won't dare speak a word outside of the script they were handed.
1. Zelle: all of the big banks have it. Credit unions are slower to adopt.
2. Mobile apps: big bank mobile apps are pretty great these days.
3. Credit cards: Bank of America rebates 2.625% for top customers.
4. Bill pay: the big bank bill pay integrations with vendors and ebills is better
Not really, there is as much fraud protection as ACH. If you’re will to make use of direct deposits and ACH transfers, you can use Zelle. Just don’t expect to be handled with kid gloves.
> Zelle’s immediacy has also made it a favorite of fraudsters. Other types of bank transfers or transactions involving payment cards typically take at least a day to clear. But once crooks scare or trick victims into handing over money via Zelle, they can siphon away thousands of dollars in seconds. There’s no way for customers — and in many cases, the banks themselves — to retrieve the money.
> The banks are aware of the widespread fraud on Zelle. When Mr. Faunce called Wells Fargo to report the crime, the customer service representative told him, “A lot of people are getting scammed on Zelle this way.”
Even Zelle says so:
> Zelle® does not offer a protection program for any authorized payments made with Zelle® - for example, if you make a purchase using Zelle®, but you do not receive the item or the item is not as described or as you expected.
Can't reply to the child comment https://news.ycombinator.com/item?id=31773886 from @proxyon but banks can reverse ACH payments. There are still rules for what can be reversed. Zelle intentionally has no reversal mechanism.
In case you weren't aware, you can always(?) click on the relative timestamp associated with a comment to bring up a reply box, even if on a deeply nested comment the reply link isn't available.
How is this any different from ACH or wire? What protection is there if you wire your money to a Nigerian prince vs. if you Zelle it to a Nigerian prince?
My credit union supports Zelle and has for a bunch of years.
My credit union's app does everything I need it to. Mobile check cash, check balances/see activity, lock or limit my debit card ($ amount, transaction type, location, etc.)
I've had several Credit Union accounts across different states. They vary in quality and services.
One has great internet banking, remote check deposit, Zelle, and I can always talk to a real human on the phone when I need to. (Bonus: hearing my hometown accent). Nearly every financial product I need is there. And, I trust them, with cause.
My other CUs have fewer services and would not function as primary banks.
Fully agree about the neo bank stuff. When I picked a bank for my current company people were recommending me Tinkoff (local neo-bank that's entirely online, but has fancy apps etc.). It was tempting due to how shiny all their stuff is, but I ended up going with Alfabank (traditional "brick&mortar" bank).
A couple months down the line I had a bureaucratic hiccup with some tax office documents and it was SO MUCH nicer to be able to walk into a bank office and speak to a person and get it all sorted out on the spot, instead of arguing with some online live chat agent to be escalated to the right place.
When I lived in the UK I used Monzo there (another online-only, app-only (!) neo bank). This seemed like a good idea at the time - until I started needing to do things that traditional banks are much better at (such as international transfers). What really hit me here is that I at some point considered doing a smartphone detox, and realised that my smartphone was the only way to fully access my personal account there. Bad idea, never again ...
(There's some symmetry between this and ordering products online for me, btw. If I can go to a physical store and look at a thing before buying I will prefer this over ordering online and potentially dealing with returns, delivery issues etc. almost 100% of the time)
I had one remote experience but here is are the caveats: 1. Needed a valid US visa (a B1/B2 will do), 2. Needed a US phone number and 3. Needed a real US-address (not necessarily yours but not a PO box).
You'll want to open a business bank account with them if you have an EIN. You might need trust or estate services depending upon the nature of your financial service needs.
I recall so many emails, calls, texts, LI messages in the past 2 years asking for signup. We were much smaller then, 2-3 FTs in US, and I kept telling them we are not your ideal customer/clientele, go mid size. The pitch was we were the exact clients(startups) needs they needed to solve credit issues and help grow!
Completely can align with the thought that is things do not work, exit the space or pivot, but keep moving on to better strategies and execution. Do the needed.
I just (June 23rd) got e-mail from Brex indicating what their criteria are:
We feel confident in delivering a best-in-class service to customers who meet any of the following criteria:
Received an equity investment of any amount (accelerator, angel, VC or web3 token);
More than $1 million a year in revenue;
More than 50 employees;
More than $500k in cash;
Tech startups who are on a path to meeting the criteria above, and are referred by an existing customer or partner.
I'm still rather shocked by how badly they handled this. Even if I weren't a one-person (and highly profitable) consulting business, I wouldn't want to stay with a firm that treats its customers so poorly.
That said, the tone of this letter was far, far better than the previous one. And it gave some clear criteria for who is in, and who is not.
So they handled this poorly, but they've at least made some effort to make things less bad.
Same. I don’t make much money (started by making ~10$/mo. Now averaging 500$/mo). I only deposited $1k in my account and never had much more than that in it to give you an idea of the scale.
My experience has been really good though and the whole process has been really painless. I recommend them too.
Whats the requirement for an LLC? I tried signing up for Mercury after getting the email from Brex and seeing it mentioned here but was rejected today. This is a Florida LLC that is around a year old. After linking my Brex account and providing my information I received an email saying that you guys cannot move forward but did not provide a reason why.
Could you clarify the minimum requirements for being a Mercury customer?
That's great to know. While I have you here, could you just clear one thing up for me?
On your home page, you say you are not a bank. From what I can tell, you seem to be a wrapper around a bank(s) (Choice Financial Group and Evolve Bank & Trust®). Does that mean signing up with you gives me an account with those banks, or do I still have to sign up with those banks independently in order to use your service?
I'm sorry if this seems like a stupid question, but it isn't apparent to me from a quick scan of your website.
EDIT: Last question... if your customers aren't required to establish a direct relationship with your underlying banks, how do you handle KYC? Would I need to fly to the US to get this started, or would a zoom session plus all the relevant ID's be enough?
> Does that mean signing up with you gives me an account with those banks, or do I still have to sign up with those banks independently in order to use your service?
Neither. The funds are held by those banks, but you won’t ever deal with them directly nor have any login to them
> Would I need to fly to the US to get this started, or would a zoom session plus all the relevant ID's be enough?
You just sign up online and provide documents. No zoom sessions.
If you have the relevant documents signing up should take ~15 minutes
SIlicon Valley Bank is clunky but it is reliable. Coming from the UK and having lived in San Francisco for the past decade I was irritated to see a firm use borrowed interest (BREXIT) to build their brand. Especially when the implications of the referendum were never clearly spelled out to UK voters. As far as Brexit the company goes, it must be tough being a start-up credit card firm with no market understanding and no sense of what will be profitable strategies in the future. Cutting small customer accounts is a great way of managing their risk profile overnight...it is a clear announcement of impending deep recession, small businesses beware!
(Web3 startup founder here) Tried signing up for Brex and after a long and painful signup process they actually needed me to connect a different business bank account. What was even the point Brex. Needless to say we just opened a Mercury account.
> This decision cannot be either changed or delayed. Your account will be closed by August 15. We’ve appreciated your business and wish you all the best in the future.
I get that corporations couldn't care less about us as people but the phrase "we appreciate your business" and its variations will forever rub me the wrong way.
I mean it might be more honest to say “you’ve always been a cost center and we’ll be damn glad to see the end of you” but would it really make you feel better?
While I don't know about this company or the situation, I'm genuinely curious as to the reasoning behind including statements like this. They seem to be purely detrimental. I certainly can't see how they would make anyone less upset about the situation, and can see how they would make people angrier. Wouldn't the page be less provocative without that last sentence?
Do the people writing these genuinely see them as statements people will appreciate? Or is the motivation to burn bridges and ensure that customers they no longer want will be offended?
It's probable outcomes like this that make accountants and other professionals so hesitant to take a chance on neo banks and Fintech startups. Money is pretty important to a well functioning business. Being left in the lurch after developing processes for this sort of thing isn't a good look at all.
I think Ramp's requirements were a lot higher than Brex's when we looked for startup neobanks — they required something like 100k in cash or something, which we don't have (lol.)
We're a startup on Brex. Not sure if we're about to get the boot.
If you're going to service startups as Brex, 80-90% are going to just cost you money and then disappear when they fail. Not sure how they're going to turn a profit this way even if a small percentage get big.
Well, the theory is that you use technology to provide the same services that a traditional bank does, but you do it better because banks have notoriously shit systems.
The practice is often that you use technology to provide a half-arsed subset of the services that a traditional bank does, but you don't have a risk department so when there's a downturn in the market it turns out you're providing services to all the people a traditional bank didn't want to deal with for good reason.
We were one of the first Brex customers. Moved millions through them before deciding to move to another provider. They were always full of surprises, but not the good kind.
While they since fixed many of the quirks and improved the overall service significantly, their priorities were always misaligned with the ones of their customers. The cherry on the top for me was when they purchased a restaurant in SF instead of fixing glaring bugs.
[disclaimer: I work at Brex, but am not speaking on behalf of the company]
I think one thing being lost in translation here is that Brex considers small businesses to be different from startups, and it's an important distinction internally that is likely getting lost externally.
For example, we just acquired Pry to help with founders at small startups figure out financial projections and needs. If you're an early stage funded startup, Brex is probably still a good fit.
The policy cited here is more about no longer being a good fit for "traditional" small businesses.
How do you actually make that distinction? My flippant guess is that the difference between the two is that a "traditional" small business is profitable
I work at Divvy and it may be worth your time. Not sure if they're exactly the same product, but we are often calling Brex a competitor, so I assume we're similar.
Interesting to see how much choice there is here vs in Europe - i've been debating who we open an account with (e.g. Brex/Ramp) given we're with SVB in London and deal in financial services flows.
We're in the S22 batch and offer payment flexibility beyond corporate cards in the UK and now US - so if you want to spread out your large payments from 3 to 12 months and avoid default dead (or offer this to your customers so you get paid upfront) would love to chat.
Meanwhile would love SVB vs Brex vs Ramp vs Mercury advice for my US banking!
Interesting to see how much choice there is here vs in Europe - i've been debating who we open an account with (e.g. Brex/Ramp) given we're with SVB in London and deal in financial services and payments.
We're in the S22 batch and offer payment flexibility beyond corporate cards in the UK and now US - so if you want to spread out your large payments from 3 to 12 months and avoid default dead (or offer this to your customers so you get paid upfront) would love to chat.
Meanwhile would love SVB vs Brex vs Ramp advice for my US banking!
Interesting to see how much choice there is here vs in Europe - i've been debating who we open an account with (e.g. Brex/Ramp) given we're with SVB in London and deal in financial services flows.
We offer payment flexibility beyond corporate cards in the UK and now US - so if you want to spread out your large payments from 3 to 12 months and avoid default dead (or offer this to your customers so you get paid upfront) would love to chat.
Meanwhile would love SVB vs Brex vs Ramp vs Mercury advice for my US banking!
My small LLC is affected by this. Anyone know a good alternative? I'm exploring creating a legacy business plan bank account like Wells Fargo, looks like they waive the monthly fee with $500 min deposit, which is the smallest among the big name banks.
I’d highly recommend actually using a real bank instead of a fintech for business banking.
As others have mentioned some of the “go-to” options like SVB have terrible (digital) services.
I’m biased but Grasshopper Bank has one of the best digital experiences, and is an actual FDIC insured bank. They are also much cheaper once you start needing services like Letters of Credits, etc.
I've been using LMCU for a couple decades living away from any branches. I use the app for cashing checks and there are ATM's in their free network at all the Speedway gas stations and CVS's around me.
If anyone needs a new financial home, I work in product at Relay Financial. We're offering $150 to anyone switching over. https://join.relayfi.com/brex-offer
For you SMB Brex customers that suddenly need to transition by Aug 15, check out this bank that is instantly approving accounts for Brex customers and helping them transition quickly:
Yikes. Not a good look for Brex and definitely a big turn off for me to explore Brex in the future. I can understand (and empathize with to some extent) what the company is doing, but it seems boneheaded to handle it like this.
This isn’t the first time doing this - at the start of the pandemic they also closed the accounts of travel and hospitality businesses en masse. They tried to win us back once the vaccine was out and business was booming but we’d lost any trust in their reliability by then.
Hey guys, if you are being rejected from Brex, there is a new modern banking solution that is instantly approving Brex customers and helping them transition over their expenses.
The title of this page says “why” but there is exactly zero on this page which explains why. There’s half of one sentence that introduces what (“we are less suited to meet the needs of smaller customers”) but even that is dressed up to the max. This is a poster child in what everyone hates about corporate communication: entirely opaque, misleading word salad. Do better.
It’s deliberate. The choices are 1) say something true that will make you look bad, 2) say something untrue that might bite you in the ass later, and 3) write ambiguous waffle that explains nothing and commits you to nothing. PR and legal will tell you to choose 3 every time.
> Brex is constantly evolving our business, and after changes to our strategy, we are less suited to meet the needs of smaller customers. The following sections will provide you with more context for your next steps.
terrible communication. it's we need ______ so you should deal with _____. that is not empathy
I can tell you that small clients definitely have no trace of empathy. They have needs, period. I think it's pretty ok to make a clean break and say "we are less suited to meet the needs of smaller customers" because, yes, you actually need a different kind of company to do that. They're not that (anymore), and they're being transparent about it.
I think "we are less suited to meet the needs of smaller customers" can be read as "smaller customers cost too much/aren't profitable enough/take up too much resources, so we're concentrating on larger ones".
Due to the anti money laundering, sanctions etc. customers are also a risk for financial institutions. Small companies won't bring much revenue so banks are sometimes not very eager to onboard them.
With such a vague explanation, my cynical side kicks in and fills in, "You're too poor, bye." Maybe there's a better reason, but they don't even try to explain.
You are though. There are lots of businesses (B2B) that won’t deal with you or put up with you. Ask anyone who has run a retail business and they’ll tell you how much pain in the ass B2C businesses are. You are poor(relatively) and not worth doing business with sometimes. That’s fine and absolutely ok.
2(!!) months to find a whole new bank for a startup or small business is a ridiculously small amount of time.
I've never heard of Brex before this but this is really bad marketing for them. Don't put your faith and one of the most important aspects of your business in these "hip" fintech companies hands. They will not feel any shame pulling the rug out from under you.
Exactly. Banks are ultimately supposed to be so reliable and consistent that they are boringly-predictable. Inconsistency and surprises imply risk, attributes antithetical to what it means to be a financial service provider (unless we're talking crypto or NFTs). People who behave as mercurial dilettantes aren't interested in professionalism or creating a sustainable business, only dabbling in areas wantrepreneurs mess around at before carpetbagging off to somewhere else "more interesting" tomorrow. Sorry to tell them, but that's not professional business activity.
We've made the difficult decision to no longer offer services to the small business market.
Back in April we launched Empower, and we decided to put the full weight of Brex towards building the best global payments platform for tech startups and larger companies. With that, we realized we couldn't do a great job serving the small business community at the same time. This has been an incredibly difficult decision for me and the team, but we believe small businesses deserve a partner that is entirely focused on them.
We know how changes in financial services can be disruptive – especially in a moment like now. We're doing all we can, and working with other financial service providers to make this transition as smooth as possible.