After figuring out what problem we were solving and the market we were attacking, back in February 2012, it was time to plan out what interactions would lead our customers to giving us money — aka the business model. At its core, Fiestah
is a marketplace that connects people that are planning events with the vendors they need, and a big piece of what we do is facilitate that transaction. So our hunt for a payment provider began.
The first company that came to mind was obviously PayPal. Then, through some research/community buzz we found Stripe, Braintree, Dwolla, Square, WePay, and a little company called PoundPay. We dove in and heavily researched each one. The biggest upfront differentiator became their fees. We got so engrossed with trying to save the most money that we briefly even thought about setting up a payment gateway/merchant account ourselves after comparing rates on FeeFighters
Enough research, it was time to play. After testing out PayPal and Stripe with a couple of our first customers, we quickly realized the actual interaction that we wanted was not happening. In both scenarios, we weren’t getting access to the funds until up to a week later so we had to front the money on our own credit cards to pay our vendors. The same was true for most of the other providers. Something just didn’t feel right. Again, we are a marketplace. Event organizers need a way to swipe their credit card, our vendors need to get paid, and we need to get our cut.
Finally, we started to understand who the real stand out was. That little company PoundPay (now Balanced) was built just for us. The biggest component that really made our business model stick was their escrow service. It made the whole transaction safe so that vendors wouldn’t get paid until they fulfilled their part of the bargain. Plus, they made selling Fiestah to vendors easier because we could flaunt the fact that they would get direct deposits straight to their bank account 24 hours after the event. Balanced was the only end-to-end solution that provided the exact setup we needed.
Everything made sense. We were no longer focused on trying to save a couple tenths of a percent. It was the seamless interaction that our customers would have that mattered most — which inherently increased their likelihood to transact. On top of that, having fewer headaches internally in managing payments meant we could focus more on growing our startup.
We’ve since been using Balanced and it’s been great working with their team and amazing to watch the product continue to improve. Bottom line, if you are building a marketplace, use Balanced.