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PayPal Freezes Mailpile Campaign Funds

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Re: PayPal Freezes Mailpile Campaign Funds

#271

Post by jessedhillon »

_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?

If Indiegogo projects are fundamentally incompatible with PayPal's risk profile as you imply,

He didn't imply this, he laid out a very eloquent case for it.

...the onus is on PayPal not to accept money for those projects. Full stop.

No, please don't stop with a naked assertion completely unsupported by any other statements you've made. Please describe for me how a business operating in one of the most regulated industries in our country, whose disclosures are voluminous and thorough, and whose business model is turnkey merchant accounts, has this obligation.

Re: PayPal Freezes Mailpile Campaign Funds

#272

Post by jessedhillon »

_pius wrote: post #268
teraflop wrote: post #258

Earlier quoted context omitted.

As has been pointed out elsewhere, PayPal has an explicit policy about how they handle presales. Why can't I turn your argument around and say that if somebody doesn't like that policy, the onus is on them to not use PayPal?

I don't grant your premise that crowdfunding constitutes "presales." Crowdfunding is an inherently speculative activity, a way to invest in a team with the hopes that they will create a product that you'd like to see in the world. Trying to fit Indiegogo into a presales model to justify PayPal's outrageous behavior here is a Procrustean approach that helps no one.

That's even worse than engaging in presales! It's practically fucking gambling the way you describe it, why the fuck would Paypal be enticed by that subtle shift in framing?

Re: PayPal Freezes Mailpile Campaign Funds

#273

Post by _pius »

jessedhillon wrote: post #272
_pius wrote: post #268

Earlier quoted context omitted.

I don't grant your premise that crowdfunding constitutes "presales." Crowdfunding is an inherently speculative activity, a way to invest in a team with the hopes that they will create a product that you'd like to see in the world. Trying to fit Indiegogo into a presales model to justify PayPal's outrageous behavior here is a Procrustean approach that helps no one.

That's even worse than engaging in presales! It's practically fucking gambling the way you describe it, why the fuck would Paypal be enticed by that subtle shift in framing?

Yeah, it's "gambling" the way donating to an artist you like is gambling.

And who's trying to entice them? Again, if doing business with Indiegogo projects is incompatible with Paypal's risk profile they shouldn't do business with Indiegogo projects. That seems straightforward.

Bizarre to think we should be sympathizing with, enticing, or otherwise fellating PayPal in this situation.

Re: PayPal Freezes Mailpile Campaign Funds

#274

Post by mcintyre1994 »

I have to worry about how crowd-funding is going to continue to break records and change businesses when there's such a huge communication issue. If there is a risk of charge-backs for an undelivered product, which there clearly is based on Paypal's reaction, then people are clearly viewing them as pre-orders. That's obviously what it has become, but for crowd-funding to really be reasonable for companies like Paypal, failed projects have to leave backers out of pocket and nobody else.

If crowd-funding is synonymous with pre-ordering a not yet available produce, I can't say I blame Paypal for wanting to keep out.

Re: PayPal Freezes Mailpile Campaign Funds

#275

Post by orclev »

eli wrote: post #158
freejack wrote: post #152

Earlier quoted context omitted.

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.

Am I missing something here? Things like IndieGoGo and KickStarter are inherently risky, but not for the payment processor, for the one doing the backing. If you back a project and it goes belly up or for whatever reason fails to deliver or under-delivers that is not "failure to provide service", that was the risk you took when you decided to back them. That money is gone, the horse has left the barn, you have no right to request a chargeback in that case. That's part of the reason why trying to weed out fraudulent campaigns is such an important thing for both IndieGoGo and Kickstarter, once the money has been paid out, unless you can pretty concretely show that the campaign was a deliberate fraud, you're out that money.

Unless your CC was stolen and used to back something without your knowledge I see no reason at all why a chargeback against a campaign should ever be granted (or maybe if the campaign is proven to be a fraud, but in that case I'd expect IndieGoGo or Kickstarter to eat that cost).

Re: PayPal Freezes Mailpile Campaign Funds

#276

Post by yebyen »

licnep wrote: post #244
yebyen wrote: post #140

Earlier quoted context omitted.

I think that Kickstarter has their shit together, and the risk of a chargeback from Kickstarter to [project leader] is relatively low, compared to the risk of a project funded directly through Amazon Payments. I don't know how indiegogo works, but in the case of Kickstarter, I would assume that Kickstarter is collecting the payments, arbiter of refunds in the case a goal is not met, and does not have access to the mo…

Not 100% sure but I think kickstarter uses amazon's deferred payment api. Basically they get authorizations from the donors to be charged a certain amount on their credit card, but the amount isn't charged until the crowdfunding ends successfully. If the goal isn't reached nothing is charged on credit cards, if it is, the money is sent to kickstarter's amazon payments account, and from there kickstarter sends it to t…

Ah. So, it sounds lower risk for Amazon, but I don't really know how indiegogo and paypal interoperate, so maybe it's the same exact pattern.

Sounds like a fantastic racket for Kickstarter!

EDIT: I've read more of the comments and it sounds like IndieGoGo has nothing to do with Paypal. They were separate funding efforts, from the same landing page. "You can pay by IndieGoGo or Paypal."

I presume the reason I couldn't figure this out from the Mailpile website is that they stopped mentioning the PayPal option when it was clear that Mailpile wasn't going to get paid by PayPal in any kind of short order. You can pay IndieGoGo or you can send Bitcoins.

That's how I'd run my business if I didn't have a product yet. You'd have to be crazy to use PayPal for that.

EDIT2: I guess IndieGoGo does offer the PayPal option. I don't understand enough about how this is put together to have an informed opinion. If PPUSD and credit cards are all handled by PayPal, then it would seem that PayPal does indeed have some risk. Maybe it's actually accepting credit cards that's crazy. _THOSE_ have some serious anti-fraud guarantees, and there's more to fraud than simple non-delivery.

Re: PayPal Freezes Mailpile Campaign Funds

#277

Post by the_mitsuhiko »

freejack wrote: post #266
kalleboo wrote: post #255

Earlier quoted context omitted.

And that's... exactly what's going on here, and what everyone is bitching so loudly about.

I'm not saying "don't bitch about paypal", I'm saying "paypal doesn't carry a lot of risk in the first place".

> I'm saying "paypal doesn't carry a lot of risk in the first place".

They do in the first place, which is why as an immediate second step, they protect themselves against that risk by keeping money in an escrow.

Re: PayPal Freezes Mailpile Campaign Funds

#278

Post by the_mitsuhiko »

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!

> You know, do their risk management before they let the vendor take payments?

They have a very clear policy on presales and you would expect that people that do presales through PayPal read those damn policies. They are even written in an FAQ and not legalese.

Re: PayPal Freezes Mailpile Campaign Funds

#280

Post by kalleboo »

chatmasta wrote: post #159
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…

I use PayPal when it's an option simply to avoid giving out my credit card number to every site I purchase from
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