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 [email protected]

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.

Now, I'm not so sure. And I'll definitely have to caveat it with this event. Was that worth it?

Word of mouth is highly influential for how startup founders pick products and I feel like this will be super damaging for your brand.

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.

Uber is an example of this (taxis had issues in Europe/Australia as well, but by far not as problematic)

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?

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.

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.

It's just easier to not use Plaid.

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.

is "Plaid is breached" necessary? Or is it enough for bank to be aware that you used Plaid?

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)

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)

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 reviewed the register https://www.federalregister.gov/documents/2011/12/27/2011-31... and the link you provided.

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.

(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)

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.

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.

http://business.sos.ri.gov/CorpWeb/CorpSearch/CorpSearchRedi...

https://opencorporates.com/filings/1091852658

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.

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.

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.

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.

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.

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.

Communicating such business impactful decision through a pop-up is ridiculous

Older banks may have lots of problems, but they usually don't get those fundamentals wrong

> 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.

Except, you know, not kick people off your platform.

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 ...

Love these strategy discussions

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.

https://www.sfchronicle.com/food/article/Multibillion-dollar...