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PayPal Freezes Mailpile Campaign Funds

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Re: PayPal Freezes Mailpile Campaign Funds

#221

Post by jtbigwoo »

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.

You've lost me. Why would a consumer ever bother with BTC? Especially if both ends of the transaction are paying fees, spreads and paying for an escrow service.

Also, does the merchant set your prices in BTC, and change prices a few times per week as the exchange rate fluctuates? Or are the prices in USD?

Re: PayPal Freezes Mailpile Campaign Funds

#222

Post by vubuntu »

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…

Excellent answer.

In the case of mass merchants where the risk profile of their business model is low (i.e they are not crowd funding or pre sales receivers of funds from end users), the paypal model works well for everyone. Risk is equally distributed between paypal and the merchant (since their risk of going bankrupt is less and not binary) and the end consumer continues to enjoy 0% risk.

But in a crowd funding (or any VC) model, the end consumer is 'donating' / 'contributing' to a project because they a) they love the product/concept b) they trust the project team c) they are feeling generous d) willing to take a gamble e) all of the above. And inherently, the reason they are participating indicates that 'they are willing to take some or all of the risk' . The problem here is that the current paypal model is unable to take advantage of their 'willingness/promise of sharing the risk', and hence not having/needing to be so draconian towards such crowd funding to cover their own behind. Probably there is no such model currently anywhere.

It is quite possible that these end customers who were willing to bet/gamble, in the end when a crowd funded project fails, having realized that they don't have to take the risk after-all, are probably more than willing to take advantage of the system (bank chargebacks) to recover their contributions. But what if there were a model where we hold them to their willingness to "bet/gamble/take the risk" decision and only be a completely/mostly passive middlemen entity that only facilitates the transaction , like an eschrow account model (but where the funds go the intended beneficiary right away , if that is what the donaters want ).

Can paypal not build such a model where they can legally get confirmation/indemnification from end consumers/contributors to be willing to accept the risk completely/mostly upon themselves (or deal directly with merchant and indemnify paypal) if the project goes kaput? Or is the banking chargeback model so deeply ingrained, complex and inflexible that it cannot be molded in any way to achieve this purpose?

What if there were a banking/credit card concept of "funds that are not eligible for chargeback per customer's decision", and only such funds are used to pay to crowdfunding campaigns etc?

Re: PayPal Freezes Mailpile Campaign Funds

#223

Post by pm24601 »

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…

One thing wrong with this answer:

Paypal has shitty customer service.

All of this might be true, but the shitty customer service means that they are instantly wrong.

Re: PayPal Freezes Mailpile Campaign Funds

#224

Post by ubernostrum »

MacsHeadroom wrote: post #116
contextual wrote: post #98

Earlier quoted context omitted.

Out of the half dozen times I've purchased with bitcoins, I was ripped off every single time. I stopped using it. I'm a supporter of bitcoins and want it to succeed, I just don't trust a lot of the vendors that use it.

What were you buying? Out of the dozens of times I've purchased with Bitcoins I have never been ripped off. Buy from reputable companies or use an escrow service. A homeless guy asked me for my car keys the other day. He said he'd clean the inside of my car and bring me the keys. I didn't give him my keys. Something tells me you would have.

So fraud is perfectly OK, in your view, as long as the person defrauded meets a certain minimum standard of deserving stupidity?

Re: PayPal Freezes Mailpile Campaign Funds

#225

Post by pm24601 »

patio11 wrote: post #203
HerraBRE wrote: post #188

Earlier quoted context omitted.

You are glossing over one important point: PayPal has a financial stake in keeping money within their network for as long as possible. For every month they keep $X within their network instead of releasing to the rightful owners, they have effectively seized whatever could have been earned by investing $X for that month. For smaller amounts (individuals, small campaigns like ours), this is negligible, but in aggregat…

I totally understand that this inconveniences you a lot. Be that as it may, your conspiracy theory has no basis in fact whatsoever . Paypal will, in fact, not make large amounts of money on transaction float -- they're already probably losing money on your account by talking to you too darn much. Interest rates are presently something like 15 basis points ($150 per year on $100k). Even if we count their underwriter a…

If it is such a problem for PayPal then they should get out of the business.

Re: PayPal Freezes Mailpile Campaign Funds

#226

Post by happywolf »

There is another angle to this: PayPal needs to make sure this money actually goes to a legitimate business, instead of some trick of money laundering. From PayPal's perspective, it has a hard time to differentiate this without details on what you claim you are going to do.

If you have concern about PayPal knowing your plan and thus cause impact to your business plan, my thought will be if your business plan is so flimsy and fragile, how much confidence you are having? Same goes to if you have concerns of other people knowing and thus pilfering your ideas.

Re: PayPal Freezes Mailpile Campaign Funds

#227

Post by mseebach »

Xylakant wrote: post #198
patio11 wrote: post #147

Earlier quoted context omitted.

Interesting reading: the Paypal Pre-sales Policy https://www.paypal-businesscenter.com/content/presale-policy... In particular I like the bullet point under "I’m a legitimate business selling products and services in advance. Why do I have reserves on my account?", which is lengthy, worth a read, and which you'll have to click to expand.

So why do they actually do business with IndieGoGo? I would expect the vast majority of IGG campaigns not to be able to deliver within 20 business days. Since the users of IGG obviously intend to use the money to fund a lengthy process of building a product that sort of invalidates the use-case.

Presumably they've done the kind of review of IndieGoGo's business that they stated they'd like to do of Mailpile and found that IndieGoGo has their risk spread broadly enough (and has a cash buffer large enough) to underwrite the risk of a particular project going down.

Re: PayPal Freezes Mailpile Campaign Funds

#228

Post by derefr »

jtbigwoo wrote: post #221
derefr wrote: post #97

Earlier quoted context omitted.

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.

You've lost me. Why would a consumer ever bother with BTC? Especially if both ends of the transaction are paying fees, spreads and paying for an escrow service. Also, does the merchant set your prices in BTC, and change prices a few times per week as the exchange rate fluctuates? Or are the prices in USD?

Who said anything about an escrow service? One of the whole reasons to use BTC is irreversibility. You can build a crowdfunding site on atomic USD->BTC->USD transfers, precisely because there's no possibility of chargebacks. Crowdfunding is fundamentally a "pay cash in advance for some probability of a return" model, and BTC is the "cash" part that would make that work. Credit cards are very bad at being cash.

Re: PayPal Freezes Mailpile Campaign Funds

#229

Post by [deleted] »

chris_wot wrote: post #135
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…

If Paypal are so concerned about presales, then in my opinion they should get out of the market. Or force their customer base to get some sort of insurance. You know, do their risk management before they let the vendor take payments? It amazes me that their marker for freezing money is for how many sales the company does . Because you wouldn't want to accept money from a successful business now!

[deleted]

Re: PayPal Freezes Mailpile Campaign Funds

#230

Post by bitlord_219 »

jafaku wrote: post #120
hackula1 wrote: post #109

Earlier quoted context omitted.

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.

Yeah, you can probably multiply your savings x10 every year by yourself anyway, no need to use a revolutionary currency for that. http://blockchain.info/charts/market-price?timespan=all&show...

Nice, logarithmic scale. Really smooths out those bubbles :)
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