Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

PayPal Freezes Mailpile Campaign Funds

mailpile.is

Post reply on HN
Print view View original

301–310 of 366 posts

Re: PayPal Freezes Mailpile Campaign Funds

#301

Post by Xylakant »

anigbrowl wrote: post #246
Xylakant wrote: post #198

Earlier quoted context omitted.

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.

Because IndieGoGo is a single actor willing to absorb a good deal of the risk itself.

I don't get your point. PayPal works as a payment provider for IGG campaigns. If IGG is willing to absorb the risk, then PayPal, as their payment provider should as well. Or, if PayPal is not willing to follow through and act as payment provider for high-risk crowdfundings, then PayPal should not be payment provider for IGG campaigns. But the middle way, first offering payment through PP and then not cashing out the money just doesn't work in my eyes.

Re: PayPal Freezes Mailpile Campaign Funds

#302

Post by triplesec »

jtbigwoo wrote: post #235
jusben1369 wrote: post #117

What strikes me as really disappointing here is that the person has no idea why PayPal has frozen their account. It's surprising to me that they don't understand the inherent risks to PayPal from a kickstarter program (how dare they ask me for my business plan?!). In this post at least it seems like they just think PayPal doesn't like them and wants to hold their money for a long time. I guess they should have done m…

>> How hard is it for them to say "In the past, we have seen crowd funding sites/services that never delivered anything. That resulted in a lot of unhappy end users going to their credit card companies and initiating a chargeback which we're on the hook to pay. As you can see, if you took the money from your account and disappeared we'd be on the hook for that entire $X. That's why it's important we understand more a…

That reasoning is akin to a police officer ordering you about without any reference to the relevant laws, or justification, or politeness. Not a way to do business, nor indeed keep the peace.

Re: PayPal Freezes Mailpile Campaign Funds

#303

Post by Xylakant »

wmf wrote: post #287
surge wrote: post #285

Earlier quoted context omitted.

Because PayPal's job is simply do deliver money from Party A to Party B. It's not their job to worry about how the money is used, the USPS does not audit the check your Grandma sent for your birthday. Crowdsourcing is a gift, like a donation to PBS, where you might get a coffee mug, but if PBS decides to to stop showing Downton Abbey, you can't rescind your donation. If PayPal has a problem with charge backs, they co…

Because PayPal's job is simply do deliver money from Party A to Party B. The problem is that PayPal is not dealing with real money but with credit cards. AFAIK, companies like Western Union don't have such onerous restrictions because they accept cash or as-good-as-cash. ...ABSOLUTELY NO CHARGE BACKS WILL BE ALLOWED... Credit cards fundamentally allow chargebacks; you can't turn them off. If you want to do business w…

> Credit cards fundamentally allow chargebacks; you can't turn them off. If you want to do business with no chargebacks you cannot accept credit cards either directly or indirectly.

So why is this not a problem for IGG? Since it obviously isn't - they cash out 15 days after funding closes. If the difference is that IGG takes a higher cut, then fair enough, let PayPal take a higher cut.

Re: PayPal Freezes Mailpile Campaign Funds

#304

Post by eli »

orclev wrote: post #300
wmf wrote: post #289

Earlier quoted context omitted.

That's an interesting position, but do any credit card companies agree with it?

I don't know. I honestly don't really know how the chargeback system functions. I mean, what's to stop me from ordering for instance some hugely expensive item from say Amazon, waiting for it to show up, and then filing a chargeback on it? Does it make a difference if I go through say Paypal to do it? Is there anything stopping anyone from filing a fraudulent chargeback (which is essentially what a chargeback against…

My experience has been that credit card companies act as an arbiter. They give the merchant an opportunity to respond to a chargeback... but they also charge you a fee just for handling it (or maybe the fee comes from the processor... I'm not sure). Too many chargebacks can also put you in a higher risk category which means higher fees for everything.

If you challenge a refund request, PayPal will ask you for additional information and then (at their discretion) fight the chargeback with the credit card company on your behalf. In my experience, this process is huge pain, but it usually works out OK.

Re: PayPal Freezes Mailpile Campaign Funds

#305

Post by wmf »

johnx123-up wrote: post #247

Can anybody explain... if using turnkey crowdfunding scripts like Agriya will help here? My previous company used Agriya and didn't face any issues from paypal. So just checking..

No, nothing will help. If PayPal discovers that you are doing crowdfunding they will freeze your money forever. Some people got away with it because PayPal didn't notice them, but you can't predict that PayPal will not notice you in the future.

Re: PayPal Freezes Mailpile Campaign Funds

#306

Post by wmf »

Xylakant wrote: post #303
wmf wrote: post #287

Earlier quoted context omitted.

Because PayPal's job is simply do deliver money from Party A to Party B. The problem is that PayPal is not dealing with real money but with credit cards. AFAIK, companies like Western Union don't have such onerous restrictions because they accept cash or as-good-as-cash. ...ABSOLUTELY NO CHARGE BACKS WILL BE ALLOWED... Credit cards fundamentally allow chargebacks; you can't turn them off. If you want to do business w…

> Credit cards fundamentally allow chargebacks; you can't turn them off. If you want to do business with no chargebacks you cannot accept credit cards either directly or indirectly. So why is this not a problem for IGG? Since it obviously isn't - they cash out 15 days after funding closes. If the difference is that IGG takes a higher cut, then fair enough, let PayPal take a higher cut.

If the difference is that IGG takes a higher cut, then fair enough, let PayPal take a higher cut.

So you're asking PayPal to create a new level of service. (They probably won't, but their business is up to them.) That's fine, but you[1] should probably do that before using PayPal. And if PayPal doesn't create the new service you want, don't use PayPal.

[1] By "you" I really mean anyone who's crowdfunding.

Re: PayPal Freezes Mailpile Campaign Funds

#307

Post by tptacek »

_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?

Your argument might be stronger if it didn't rely on labeling ("absurd apologism", which is itself an absurd accusation when you think about what apologism means) and appeals to emotion. The short answer to your question is that you should concern yourself (not sympathize) with their problems when those problems intersect with yours and guide their decisions.

Re: PayPal Freezes Mailpile Campaign Funds

#308

Post by mistercow »

orclev wrote: post #286
patio11 wrote: post #232

Earlier quoted context omitted.

Amex for one starts the 180 day countdown at the day of delivery or expected delivery , so you can get them to reverse a transaction literally years after the fact if necessary -- pre-ordering Duke Nukem Forever in 2005 would still be chargebackable into 2013 . They're also well-known for bending over backward for cardholders, particularly very valuable cardholders. (They require merchants to retain all records for 2…

With crowdfunding the date of delivery is the date the campaign completes, not the date the rewards, if any, are shipped/published/whatever. At worst given the typical 30 day campaign that means they don't need to worry about chargebacks more than 220 days out. That's still nearly a year, but honestly I think once a campaign funds they shouldn't even process chargebacks against it unless the original backing can be s…

It seems that way to me too. Funding a campaign isn't buying a product (and that we have coming to treat it as such is a Problem). The question, I suppose, is whether the credit card company will see it that way.

Years ago, when I was working on a shareware app for the Mac (long before the App Store), I released the beta as donationware, and gave users the incentive of a free license for version 1.0 if they donated a certain amount (which increased with each update). It was very small scale, but it allowed me to bring in some income while I was working on the project, and gave me an incentive to get it done. But it was an incentive for a donation, and that donation could be any amount. It wasn't a preorder, and it would have been silly to treat it as such.

It actually hadn't occurred to me until just now that what I was doing was crowdfunding before it was called "crowdfunding".

Re: PayPal Freezes Mailpile Campaign Funds

#310

Post by Xylakant »

wmf wrote: post #306
Xylakant wrote: post #303

Earlier quoted context omitted.

> Credit cards fundamentally allow chargebacks; you can't turn them off. If you want to do business with no chargebacks you cannot accept credit cards either directly or indirectly. So why is this not a problem for IGG? Since it obviously isn't - they cash out 15 days after funding closes. If the difference is that IGG takes a higher cut, then fair enough, let PayPal take a higher cut.

If the difference is that IGG takes a higher cut, then fair enough, let PayPal take a higher cut. So you're asking PayPal to create a new level of service. (They probably won't, but their business is up to them.) That's fine, but you[1] should probably do that before using PayPal. And if PayPal doesn't create the new service you want, don't use PayPal . [1] By "you" I really mean anyone who's crowdfunding.

> So you're asking PayPal to create a new level of service.

No, I'm just saying that the problem seems not to be a fundamental one. And the point here is that PP does accept payments on behalf of IGG. If I decide to fund a campaign, one of the payment options is PayPal (obviously that can be configured and turned off, since it's off for mailpile atm). The funds donated to mailpile via PayPal were donated via the IGG website. That means to me, that PayPal is well aware that the user is trying to fund a risky endeavour, since by definition all IndieGoGo campaigns are presale and likely to fail.

What I don't get here is: Why does PayPal as Payment Provider for IndieGoGo suddenly cop out and say "My dear, but that's too risky. I'll freeze the funds."

Post reply on HN