Payments startup Balanced has been growing quickly over the past several months, with 30 percent monthly transaction volume growth since August. But in that time, the Y Combinator-backed company has continued to add new features that its partners request. Due to popular demand, the latest update to Balanced’s payments platform will make it easier for users to have payments deducted out of their bank accounts, rather than paid by credit or debit card.
To recap: Balanced provides a two-sided payment platform, specifically for peer-to-peer marketplace startups. The idea is that certain businesses need to be able to both receive payments from customers and pay them out to service providers or sellers, and until recently, there wasn’t a good solution for these companies. The company has capitalized on the increase in marketplace startups, offering a simplified payments solution for both sides of the transaction.
The newest feature from Balanced is designed to help its partners deduct funds directly from users’ bank accounts. With Balanced Bank Payments, users making payments on peer-to-peer marketplaces will now be able to do so by entering their bank account information, rather than through credit or debit cards, or other payment-processing systems.
Third-party developers need only hook into the Balanced API and create a form on their website in which an end user would enter his or her bank account info. Once that’s done, Balanced uses the same token system for PCI-compliant credit card transactions. Once the account is verified, Balanced lets the developer know when it can deduct funds.
Bank payments were Balanced’s most-requested feature from its clients, and it helped develop the API for enabling it by working in close contact with some of them. While slower than most other transaction types — it typically takes at least three days to transfer funds between accounts — there are some use cases where direct deduction from a bank payment makes sense. Like, for instance, when a large amount of money is being deducted: Co-founder Jareau Wade told me Balanced Bank Payments could make sense for services like FundersClub, where users are investing large amounts at once.
Balanced Bank Payments are also lower-cost than other transaction types. While it charges 2.9 percent plus 30 cents per transaction for credit card transactions, deductions from a bank account are only 1 percent plus 30 cents per transaction. That could save its clients a lot of money if they’re willing to wait a few extra days for transactions to go through.
Balanced has amassed a pretty impressive list of clients, with companies like TheFancy, Kitchit, Crowdtilt, Copious, and Zaarly using the platform. The company was founded by a bunch of former Milo.com employees, and has raised $1.4 million from Y Combinator, SV Angel, Airbnb CEO Brian Chesky, Ashton Kutcher, and Reddit CEO Yishan Wong, among others.