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
> 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.
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?
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.
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.
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
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?
> 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.
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.
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.
> 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 :)
Readit News
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.
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.
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.
In a bygone era I'd have suggested that shame came into it.
It's because you can't convince anyone you're competent whilst acting up like this.
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
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.
- Max T, CTO Mercury
There has got to be a better way for us to accomplish this.
Why can’t a Mercury wire or ach successfully clear to Circle?
As a Mercury customer what I know is that not a single one I’ve tried has worked resulting in days locked funds.
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.
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.
Source: We're a neobank too (and we use Brex cards for company purchases)
they probably would still lose money off you even if you paid $100 a month, given what you've described.
Deleted Comment
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.
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
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.
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.
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.
> Brex makes it easy for founders, finance teams, and employees to spend smart, grow fast, and enjoy the ride.
Maybe you should pivot your (customer) marketing material as well as your pitch deck.
[0] https://www.brex.com/product/
I’m guessing they were just chasing vanity metrics for a funding round
And if the answer is no, then does that mean if we're not growing fast enough / raising money fast enough, you will kick us out?
Please clarify.
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.
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Except, you know, not kick people off your platform.
You have made decisions capable of inflicting tremendous pain on entirely innocent people eg employees.
How are you to be believed that you will not randomly hurt more people?
Buddy this isn't PR this is proving you're not a dangerous child entirely before you defend your job.
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.
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.
Good riddance. I dodged a bullet.
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?
Bankers be hankering for more bankering.
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https://www.sfchronicle.com/food/article/Multibillion-dollar...
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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.
I don't know Brex but looking around their website they seem to be a fintech company but not a bank (they don't seem to have a licence)
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.
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.
Currently banking with Mercury and love it BTW.
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.
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.
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Does anyone else know about or use Silicon Valley Bank? How do they compare to Mercury?
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.
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.
Customer trust is hard to earn (I loved their product!) but so, so easy to lose.
Vimeo is publicly held, so we can see how this worked out.[1] Price one year ago, at the peak, $49. Price today, $6.54.
[1] https://www.msn.com/en-us/money/stockdetails/fi-c26vvh?ocid=...
If they didn't, they'd stay "shitty youtube" and lose. They decided to differentiate themselves to have a chance at finding their target market.
Vimeo knew their target but sadly that market isn't large enough to pay the bills.
https://www.msn.com/en-us/money/stockdetails/financials/fi-c...
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.
> Don't charge it, Brex it.
https://twitter.com/TrungTPhan/status/1262799209654177792
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.
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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.
If you are looking for an alternative, we are 100% committed to businesses of all sizes:
A) the smallest businesses can be the next big startup
B) We maintain strong unit economics at all sizes.
We setup a landing page to get these customers onboarded quickly: https://mercury.com/partner/brex
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.
This should immediately be on Mercury's landing page. :)
I'm not sure but I think PG has talked about this strategy.
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 don't want to start a debate on how crypto should be treated, but currently it is treated the way it is.
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?
Edit: I didn’t even know Mercury doesn’t charge for sending wires. As a customer, I’m delighted.
Edit: already have a landing page up for migrating Brex folks, chef kiss
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.
Sooo... The model only works if you carefully cherry pick the customers?
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 :)
@immad, if you verify Mercury's listing on SaaSHub, I can organize featuring it on the newsletter. Cheers!
(Disclaimer: I work for Mercury!)
I was happily using Brex until now.
Any suggestions to speed up the waiting?
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