PayPal Freezes Mailpile Campaign Funds • Hacker News Board

Re: PayPal Freezes Mailpile Campaign Funds

#121

Post by the_mitsuhiko » Thu, Sep 05, 2013, 12:53 PM UTC

cliffu wrote: post #99

tzs wrote: post #85

Earlier quoted context omitted.

> Sure, not everybody can contribute in bitcoin. Why would anyone WANT to contribute in Bitcoin? From a contributor point of view, Bitcoin leaves them massively vulnerable to fraud--it is almost as bad as mailing an envelope full of cash.

They are crowdfunding a speculative application. That's already mailing envelopes of cash. Although the users read that they are funding development and not buying software, Paypal grabbed it all and said they're worried about fraud. Bitcoin lets the user assert that they trust the recipient. Or they could trust a third party escrow recipient. There's no payment processor to restrict who a crowdfunder wishes to trust…

People that crowdfund often do not trust the project. PayPal probably flagged them because of cancellations.

Re: PayPal Freezes Mailpile Campaign Funds

#122

Post by calpaterson » Thu, Sep 05, 2013, 12:55 PM UTC

ig1 wrote: post #82

grandalf wrote: post #68

Earlier quoted context omitted.

I've seen PayPal nearly put several small businesses out of business. There are some things that cause PayPal to just freeze an account, and it's next to impossible to speak to a human or to otherwise get the situation resolved. Pretty much the only threat to Stripe's eventual world domination would be PayPal getting its act together.

Most of Paypal's competitors weren't wiped out by Paypal being good, they were wiped out because they weren't as good as handling risk and fraud as Paypal. They got wiped out by criminals. Paypal is risk averse, which means you shouldn't use them for cases where you're taking a large amount of money up front and not delivering in the near future (i.e events, crowd-funding), or alternatively get pre-approval from Payp…

While fraud was a big deal for PayPal, based on reading The Paypal Wars (http://en.wikipedia.org/wiki/The_PayPal_Wars) network effects, good early customer engagement and the fact that the dotcom bust killed everyone else's funding were also pretty important.

Everyone keeps saying that fraud will be a serious problem for Stripe, but they move a huge amount of money now which is probably comparable to the period when PayPal nearly got destroyed by fraud - which was around the year 2000 when the web was a lot smaller.

Re: PayPal Freezes Mailpile Campaign Funds

#123

Post by jasonlotito » Thu, Sep 05, 2013, 12:57 PM UTC

Xylakant wrote: post #76

kalms wrote: post #67

Earlier quoted context omitted.

I see your point. PayPal is a business partner in this setup, and they are shouldering a lot of risk on the developers behalf. I can understand not wanting to share something as intimate as a business/developement plan, but PayPal is within their rights, boty legally and morally, to ask for one. If the developers are having trouble with this, they should find another partner for their venture. (imho) That said, PayPa…

> but PayPal is within their rights, boty legally and morally No and no. They're a payment provider, a utility, not a partner. They could have stated up front that they want a business plan or could have denied acting as payment provider. They could have demanded the backers to waive their refund rights. I'd even be on their side if they kept a percentage of the funds as security. The backers have a moral right to se…

> they collectively are shouldering a much bigger risk than paypal in that transaction.

No, they are not. Financially, PayPal is the one shouldering the biggest risk.

Edit: > No and no. They're a payment provider,

They most likely have legal obligations in various jurisdictions and with the credit card providers to do due diligence. And looking at business plans and how payments like this will be used is an important part of that. Try getting the same funding directly from a bank rather than going through a middleman and see what they ask for.

Every time a PayPal story comes up, I'm always reading at how the people are innocent and everything is fine, and yet, they are doing something shady.

Here you have an organization that's effectively asking for donations to support a project, but it's not, from what I can tell, certified as a non-profit.

So suddenly yes, that does become high risk. Any banker in the world is going to look at this scenario and know that it's high risk.

Re: PayPal Freezes Mailpile Campaign Funds

#124

Post by jfoster » Thu, Sep 05, 2013, 12:57 PM UTC

kalleboo wrote: post #51

bowlofpetunias wrote: post #38

People should start to understand that crowdfunding is not a trivial business from a legal and regulatory perspective. Yes, PayPal sucks, but you can run into this crap with any bank or payment service provider you don't have clear and direct business dealings with, and who you haven't informed upfront about what you're up to. Also, it's just plain lazy and irresponsible of IndieGogo to pay out via PayPal, at least n…

I'm surprised PayPal still haven't taken a clear stance against crowdfunding like Amazon Payments have. That's part of the problem - it's really vague as to what situations PayPal will intervene in.

Amazon Payments took a stance against it? When? Kickstarter uses them.

Re: PayPal Freezes Mailpile Campaign Funds

#125

Post by jafaku » Thu, Sep 05, 2013, 12:58 PM UTC

Samuel_Michon wrote: post #119

jafaku wrote: post #106

Earlier quoted context omitted.

Remember that "chargebacks for everyone, no questions asked" is a US and Australia-only thing. In most other places it's not very common (you need to go premium for that), and Bitcoin would be more than welcome to reduce fees, delays, frozen accounts, and other bull . Fraud is still fraud, so if you get defrauded by someone, all you need is that a judge decides that Bitcoin is money, like it has already happened with…

> all you need is that a judge decides that Bitcoin is money And then what, do I need to sue every time someone stiffs me? That would be a colossal waste of time and money, which means in practice that the fraud gets away with it – knowing they might not even have the funds to pay me. The way it works now is, if I’m not satisfied and the merchant isn’t being reasonable, I can call my credit card company and request a…

I was talking about fraud, which is a lot broader than "I bought something on Amazon and something went wrong". If you fall into a ponzi scheme, a credit card won't save you.

About chargebacks, again, it's a US and Australia-only thing, so yeah, maybe in those places Bitcoin won't look so good, won't be adopted, and they will be left behind.

Re: PayPal Freezes Mailpile Campaign Funds

#126

Post by TazeTSchnitzel » Thu, Sep 05, 2013, 12:58 PM UTC

ballard wrote: post #71

HarrietJones wrote: post #54

Earlier quoted context omitted.

Mailpile sets off alarm bells for me. The web page seems big on promises, and decent webmail isn't the eaiest thing in the world to make a decent UI for. Never mind that it's all wrapped around some kind of seamless background application. I'm doubtful that they'll do what they think they can do. Good luck to them, but I'm unsuprised that paypal has witheld funds.

FUD. Every project that's not yet done is a crystal ball of promises until its delivered. IGG and KS have good records so far. And these guys that put their names on this project are highly motivated to deliver.

"Things don't just happen because Prime Ministers are very keen on them! Neville Chamberlain was very keen on peace!"

Re: PayPal Freezes Mailpile Campaign Funds

#127

Post by pcunite » Thu, Sep 05, 2013, 1:02 PM UTC

pc wrote: post #88

ig1 wrote: post #82

Earlier quoted context omitted.

Most of Paypal's competitors weren't wiped out by Paypal being good, they were wiped out because they weren't as good as handling risk and fraud as Paypal. They got wiped out by criminals. Paypal is risk averse, which means you shouldn't use them for cases where you're taking a large amount of money up front and not delivering in the near future (i.e events, crowd-funding), or alternatively get pre-approval from Payp…

> I've no idea what the current fraud level against Stripe is, but as they become more mainstream they're going to need to employ more anti-fraud and anti-risk measures as their exposure increases. I'm one of Stripe's cofounders. For what it's worth -- we already process billions of dollars a year. (More than PayPal when it was acquired.) There'll always be more we can do on the fraud/risk side, but we're already ope…

Thank you for Stripe ... it freed us from PayPal's chains.

Re: PayPal Freezes Mailpile Campaign Funds

#128

Post by M4v3R » Thu, Sep 05, 2013, 1:03 PM UTC

hackula1 wrote: post #109

M4v3R wrote: post #70

Earlier quoted context omitted.

People can get tired of other people telling this, but really, they should use Bitcoin. There are several advantages of this: accountability (you can verify with the block chain that they really received your payment), ease of use (utilizing 3rd parties like Coinbase, BitPay and others you don't really have to know how Bitcoin works to pay with them) and most importantly - irreversibility - once you receive Bitcoin t…

I will accept goats and chickens before I accept Bitcoin. 99% of people have never even heard of it. I am pretty certain that 100% of my customers have never heard of it. Not worth my time.

Quite hard to accept goats and chickens from people living on another continent. With Bitcoin it's possible, fast and costs pennies. Plus, many Bitcoin supporters are buying from merchants that accept Bitcoin just because of that, so with little cost you get more business. I don't see how this could be a bad thing or not worth your time.

Re: PayPal Freezes Mailpile Campaign Funds

#129

Post by dugmartin » Thu, Sep 05, 2013, 1:04 PM UTC

jfoster wrote: post #124

kalleboo wrote: post #51

Earlier quoted context omitted.

I'm surprised PayPal still haven't taken a clear stance against crowdfunding like Amazon Payments have. That's part of the problem - it's really vague as to what situations PayPal will intervene in.

Amazon Payments took a stance against it? When? Kickstarter uses them.

About two years ago - Kickstarter is grandfathered in.

Re: PayPal Freezes Mailpile Campaign Funds

#130

Post by ig1 » Thu, Sep 05, 2013, 1:05 PM UTC

pc wrote: post #88

ig1 wrote: post #82

Earlier quoted context omitted.

Most of Paypal's competitors weren't wiped out by Paypal being good, they were wiped out because they weren't as good as handling risk and fraud as Paypal. They got wiped out by criminals. Paypal is risk averse, which means you shouldn't use them for cases where you're taking a large amount of money up front and not delivering in the near future (i.e events, crowd-funding), or alternatively get pre-approval from Payp…

> I've no idea what the current fraud level against Stripe is, but as they become more mainstream they're going to need to employ more anti-fraud and anti-risk measures as their exposure increases. I'm one of Stripe's cofounders. For what it's worth -- we already process billions of dollars a year. (More than PayPal when it was acquired.) There'll always be more we can do on the fraud/risk side, but we're already ope…

(in a previous life I worked in front office investment banking so had to undergo anti-fraud and anti-money laundering training as well as worked on general exposure risk issues)

The problem is that fraud/risk (like tech security) is it often involves black swan events. Everything seems fine right until the point where it's not and you're on the hook for millions of dollars (Stripe is probably in the position where you can afford to take a few black swan type events and survive; a lot of Paypal competitors weren't).

Given that Stripe don't do the "wallet" approach of Paypal and is primarily focused on API customers I'm guessing your risks in general are lower, but I'd recommend you be careful about becoming over-complacent.