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Paypal and Crowdfunding: don’t do it

garethhayes.net

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Re: Paypal and Crowdfunding: don’t do it

#21

Post by analog31 »

lexx wrote: post #2

So many paypal stories like that. Why do people still use it?

I use a PayPal merchant account for my very small side-business, selling a specialized gadget that's not very expensive. Over the past 7 years, PayPal has been utterly flawless. I have had zero issues. I monitor web forum chat, and enough people have commented about my product that I would know it if someone had a bad experience, or was reluctant to buy from me, due to PayPal.

This is without discounting any of the horror stories that I've read. In my little niche market, those stories tend to involve the eBay side of PayPal.

Once in a while I research alternatives to PP, and have really not found one that caters to the super-small business.

Re: Paypal and Crowdfunding: don’t do it

#22

Post by wmt »

kentf wrote: post #15

Everyone on HN should be crowdfunding with www.tilt.com (YC 12). Use Reward Code: HN10 and get $10 towards any tilt and 0 credit card processing fees.

It fills me with confidence when even a company has obviously never read its TOS and it's riddled with hilarious glitches like this:

"Tilt is not liable or responsible for:

1. Any Campaign not attaining a goal amount, no matter the reason. 1. In the event the Campaign Tilts, any refunds, including without limitation, for Contributions or Perks. 1. Any errors or omissions in the Destination Account.

2. The failure of the Payment Processor or Campaign Admin to pay Contributions to the Beneficiary. 1. Checks that are incorrectly processed, lost, or stolen.

3. Your Member Content."

That's a lot if firsts!

Re: Paypal and Crowdfunding: don’t do it

#23

Post by glogla »

droopyEyelids wrote: post #18
kijin wrote: post #14

Earlier quoted context omitted.

The underwriting process is designed for stable businesses with a proven track record. It's not very suitable for today's crowdfunded projects, which is why those projects have to resort to PayPal. Just telling them to go through the good ol' underwriting process doesn't really help.

Doesn't help who? I say it does help them, because they need to understand no one is going to give them an unsecured loan, no matter what kind of business they're running. Thats the job of venture capital- not the job of your CC processor. A crowd funding business especially needs to go through underwriting, which will involve proving they have the capital reserves or credit to handle problems that arise. Fostering t…

It's disingenuous to refer to crowdfunding as to "unsecured load".

Re: Paypal and Crowdfunding: don’t do it

#24

Post by dangrossman »

lexx wrote: post #2

So many paypal stories like that. Why do people still use it?

Because their USP hasn't changed in 17 years: PayPal is easy, trusted by buyers, cheap, and will plug in to just about any selling system in the world with minimal effort. You can sign up immediately, and withdraw money you receive immediately. For a couple hundred million people a year, it does the job as good or better than the alternatives. In a lot of countries, there are no comparable alternatives.

Re: Paypal and Crowdfunding: don’t do it

#25

Post by Shivetya »

lexx wrote: post #2

So many paypal stories like that. Why do people still use it?

touch points.

the less people with my CC info the better and so many vendors accept pay pal it becomes a no brainer. for many sites I only need to enter my paypal information and not even register which in itself is usually obnoxious

Re: Paypal and Crowdfunding: don’t do it

#26

Post by smeyer »

nhangen wrote: post #17
kentf wrote: post #15

Everyone on HN should be crowdfunding with www.tilt.com (YC 12). Use Reward Code: HN10 and get $10 towards any tilt and 0 credit card processing fees.

Do you work for Tilt?

Either that or this is quite the coincidence: https://clarity.fm/kentf

Re: Paypal and Crowdfunding: don’t do it

#27

Post by makeitsuckless »

lexx wrote: post #2

So many paypal stories like that. Why do people still use it?

Because they are unable or can't be bothered to setup receiving payments in a legitimate fashion. This is one good example.

Yes, doing it properly, with sufficient guarantees for all parties involved, is hard, probably way harder than it should be, but there are good reasons why payments are governed by all kinds of rules and regulations.

Paypal is a shady business that allows other shady businesses to cut corners at a high risk. People take that risk because they are either lazy or have no other options, and this is an example of the former.

Especially since it concerns crowdfunding, and not a straightforward transaction of goods for currency, I find it hard to have any sympathy for the "victim". Being a small business or non-profit org is no excuse for playing fast and loose with other peoples money.

Re: Paypal and Crowdfunding: don’t do it

#28

Post by droopyEyelids »

glogla wrote: post #23
droopyEyelids wrote: post #18

Earlier quoted context omitted.

Doesn't help who? I say it does help them, because they need to understand no one is going to give them an unsecured loan, no matter what kind of business they're running. Thats the job of venture capital- not the job of your CC processor. A crowd funding business especially needs to go through underwriting, which will involve proving they have the capital reserves or credit to handle problems that arise. Fostering t…

It's disingenuous to refer to crowdfunding as to "unsecured load".

With a normal transaction, goods or services are provided in exchange for money.

With a crowd funded transaction, a promise of future goods or services are provided in exchange for money. Thats why it's treated differently in the payments industry.

Another way to think of it: If crowdfunding wasn't available to the business, a loan would serve the exact same purpose, wouldn't it? And if the business got loans from multiple providers, wouldn't that be a form of crowd funding? The only difference is that traditional loan providers have to work out their own security with the business, while crowdfunders get security from the chargeback mechanisms of their payment processor.

Do you see any of what I wrote as disingenuous?

Re: Paypal and Crowdfunding: don’t do it

#29

Post by wolfgke »

lexx wrote: post #2

So many paypal stories like that. Why do people still use it?

Because most other payment providers (say Stripe) require a credit card, which is, at least in Germany, a not very popular payment option (the prefered payment option there is SEPA direct debit).

I often have the impression that lots of vendors forget that in other countries (say, Germany) not everbody has and is willing to get a credit card and other payment options are prefered. Paypal provides them (in this case SEPA direct debit), while e.g. Stripe does not. So I use Paypal, though I don't like it.

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