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PayPal Freezes Mailpile Campaign Funds

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Re: PayPal Freezes Mailpile Campaign Funds

#151

Post by pc »

ig1 wrote: post #130
pc wrote: post #88

Earlier quoted context omitted.

> 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 y…

> I'd recommend you be careful about becoming over-complacent.

Absolutely. Indeed, I'd characterize us as actively paranoid. My point was merely that we're already operating at a scale that needs pretty good fraud systems.

(I think we're mostly in strong agreement.)

Re: PayPal Freezes Mailpile Campaign Funds

#152

Post by freejack »

patio11 wrote: post #118

Indulge me in a flight of fancy in which we pretend, for the sake of argument, that a) Paypal is run not by Snidely Whiplash clones but b) by smart geeks working with thin margins in a highly regulated industry where c) customers are at risk essentially never, d) merchants eat 100% of the risk if they stay in business, and e) Paypal eats 100% of the risk if the merchant doesn't. Why is Paypal very skeptical of pre-sa…

Whoa there. Paypal loses nothing to fraud. Just like all the other middlemen, Visa, MC, etc., they shift their losses onto the merchants.

The way this works out is that Mailpile files an answer to Paypal's RFI, Paypal reviews it and says something like "There's a 90 day hold on funds deposited to your account until you can demonstrate that you aren't high risk", Mailpile complies and everyone walks away happy.

(Background: I'm a Paypal merchant and we're processing close to $30m/year through them. Over the years I've paid Paypal hundreds of thousands, if not millions of dollars, in chargeback fees, fraud fees, Visa fines, etc.)

Re: PayPal Freezes Mailpile Campaign Funds

#153

Post by BitMastro »

derefr wrote: post #97
BitMastro wrote: post #92

Earlier quoted context omitted.

There is something I don't understand about Bitcoin: right now there is a lot of instability in the exchange rate of Bitcoin and everyday currency like dollars, euros, or pounds, from the graph I checked from here[1]. How can it be a viable alternative, when its value can change by 40% in a month? Gaining or losing value is not important (if it's increasing value, I have to delay exchanging to dollars as much as poss…

Just don't keep BTC. I'm surprised the default method of using bitcoins isn't "I give send USD to my transfer agent, they make a BTC transfer to your transfer agent, and your transfer agent immediately deposits USD in your account", with the entire process occuring with a defined instantaneous exchange rate.

That's interesting! But isn't there any delay between currency exchange and an exchange fee as well?

Re: PayPal Freezes Mailpile Campaign Funds

#154

Post by pyalot2 »

Rovanion wrote: post #100
pyalot2 wrote: post #26

Earlier quoted context omitted.

Bitcoin ftw. Sure, not everybody can contribute in bitcoin. But on balance, bitcoin beats paypal by a factor of infinity. Why infinity? Well, with bitcoin you could at least have some contributions, i.e. > 0. With paypal you get 0 contributions. (N>1)/0 = infinity.

Anything divided by 0 is undefined.

> 1.0/0.0 -> Infinity (at least in javascript)

The IEEE floating point standard (for any precision) defines anything divided by zero to be the infinity value (all bits except the sign set to 1).

You where saying?

Re: PayPal Freezes Mailpile Campaign Funds

#155

Post by acjohnson55 »

tinco wrote: post #50
HerraBRE wrote: post #14

Earlier quoted context omitted.

IndieGoGo offers PayPal as an option. Many people prefer it, for various reasons. The funds donated via. credit card directly on IndieGoGo are still available to us.

Maybe you can show Paypal this, demonstrating you are carrying a large share of the risk as well. It's all risk containment for them. I'm a bit surprised that you would write such a confused blog post about the freeze, isn't it common knowledge that this happens with all Paypal accounts that do not deal in (existing) physical things?

I, for one, had no idea

Re: PayPal Freezes Mailpile Campaign Funds

#156

Post by andyhmltn »

Karunamon wrote: post #134
tinco wrote: post #52

Earlier quoted context omitted.

It is an escrow service because it allows the buyer to reverse the transaction.

It wouldn't kill paypal to have non-reversible transactions as long as this is made clear to the user.

Having dealt with a lot of chargebacks (none legitimate) people that like to chargeback seem to just say that someone unauthorised gained access to their account and they never meant to make that payment so they can just turn around and say 'as I didn't make the payment I didn't agree to that'

It would then make it super easy for someone to hack a PP account and buy loads of stuff with 'non-reversible' transactions.

Re: PayPal Freezes Mailpile Campaign Funds

#157

Post by Xylakant »

jasonlotito wrote: post #123
Xylakant wrote: post #76

Earlier quoted context omitted.

> 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…

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

Actually not. Let's assume a chargeback rate of 100%. The donated amount was 135 000 USD, the amount PayPal handled was 45 000 USD, so the remaining backers collectively shoulder about twice as much risk as PayPal.

> They most likely have legal obligations in various jurisdictions and with the credit card providers to do due diligence.

They're an official payment provider for IGG. I assume they know what IGG is by now and the risks associated with that. So they can either

a) choose to forfeit that business because it's too risky. Fair enough.

b) Lay out the conditions early: Hey, we'll take the money and keep it for a year. But would would IGG then still offer PayPal as payment provider?

c) eat the risk and honor the implied contract.

> 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.

Yes, that's what they do. Every backer voluntarily decided to support that business. I backed kickstarter campaings because the project sounded nice and I wanted those people to have a chance to finish their project, because I thought it was a worthy thing to back. I never even touched the finished goods. A lot of open-source projects ask for donations without being non-profits, for example nginx do. Point is: everyone can decide under which conditions he'd like to support a project - certified non-profit or not, but that's not PayPals business.

> So suddenly yes, that does become high risk.

Sure. Nobody denies that crowdfunding is not inherently risky. But see above. Either don't participate or live with the risk. But PayPal is trying to eat the cake and still have it too: They happily took the money and kept the fees, but will neither refund it to the backers nor cash it out. That's shady in my opinion.

Re: PayPal Freezes Mailpile Campaign Funds

#158

Post by eli »

freejack wrote: post #152
patio11 wrote: post #118

Indulge me in a flight of fancy in which we pretend, for the sake of argument, that a) Paypal is run not by Snidely Whiplash clones but b) by smart geeks working with thin margins in a highly regulated industry where c) customers are at risk essentially never, d) merchants eat 100% of the risk if they stay in business, and e) Paypal eats 100% of the risk if the merchant doesn't. Why is Paypal very skeptical of pre-sa…

Whoa there. Paypal loses nothing to fraud. Just like all the other middlemen, Visa, MC, etc., they shift their losses onto the merchants. The way this works out is that Mailpile files an answer to Paypal's RFI, Paypal reviews it and says something like "There's a 90 day hold on funds deposited to your account until you can demonstrate that you aren't high risk", Mailpile complies and everyone walks away happy. (Backg…

I think you misread what patio11 wrote. As he correctly points out, "Paypal eats 100% of the risk if the merchant doesn't [stay in business]"

New companies fail before getting a product out the door all the time. It's a very real risk.

Re: PayPal Freezes Mailpile Campaign Funds

#159

Post by chatmasta »

downandout wrote: post #37

I don't know why, in 2013, people are surprised when they use PayPal and wind up without access to the money for months or years. Paypal apologists will say that this is relatively rare. Even if that is true, since the criteria they use to take these actions are often beyond the control of merchants, using PayPal is an unacceptable risk for any business that doesn't have at least 6 months of working capital. Always a…

Everyone always recommends Stripe as an alternative to PayPal. Sure, it's an alternative to PayPal for accepting credit cards. But it doesn't accept payments from PayPal accounts, which is the only reason most people use PayPal in the first place. I have a business in the SEO sector, and many of my clients are foreign without credit cards. Over 50% of my transactions are from PayPal (the that option is direct credit card through a traditional gateway).

Re: PayPal Freezes Mailpile Campaign Funds

#160

Post by marijn »

I feel kind of bad about the fact that they initially didn't enable paypal donations, but enabled them a few hours after I suggested they do. I might be responsible.

My own smaller (16k) indiegogo campaign went completely over paypal without a hitch [1]. Probably the fact that my paypal account has been seeing relatively large transaction volumes for years also helped prevent the alarm algorithm from triggering on it.

[1]: http://www.indiegogo.com/projects/tern-intelligent-javascrip...

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