PayPal Freezes Mailpile Campaign Funds

Post by lutorm » Thu, Sep 05, 2013, 4:21 PM UTC

vubuntu wrote: post #222

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…

Post by kalleboo » Thu, Sep 05, 2013, 4:23 PM UTC

dpcx wrote: post #77

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.

That's funny, because Amazon Payments is exactly what crowdfunding site Kickstarter uses[0] to pay out to projects. [0]: http://www.kickstarter.com/help/amazon

Post by kalleboo » Thu, Sep 05, 2013, 4:31 PM UTC

freejack wrote: post #161

eli wrote: post #158

Earlier quoted context omitted.

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.

Nope, Paypal only eats the risk if they release funds. They rarely release funds on high risk accounts, at least not without retaining a rolling deposit.

Post by foobarbazqux » Thu, Sep 05, 2013, 4:33 PM UTC

_pius wrote: post #245

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…

This is absurd apologism. If Indiegogo projects are fundamentally incompatible with PayPal's risk profile as you imply, the onus is on PayPal not to accept money for those projects. Full stop. Why on Earth should we sympathize with PayPal about internal aspects of their underwriting at the expense of a small business whose funds they've practically seized?

Post by kalleboo » Thu, Sep 05, 2013, 4:36 PM UTC

grandalf wrote: post #185

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…

It's not just presales. When any kind of fraud alert is triggered, PayPal freezes the account. There is no way to get a human being on the phone to understand why the account was frozen, when it will be unfrozen, etc. Even if it's obvious to any reasonable human that no fraud occurred.