How PayPal screws open source projects by freezing donation accounts

Reading the mail he uploaded from PayPal, it sounds like this is the direct result of a Singaporean financial law. PayPal has to obey the laws in each country it operates in like any other business. If Singapore doesn't allow them to collect donations for non-charity organizations, then they can't. It is neither fair to blame PayPal for that nor to generalize it as a concerted effort to damage all open source projects.

This is the same kind of reaction people had when India blocked PayPal from operating normally (in terms of bank transfers) until it complied with some bank regulations there. Indians blamed PayPal when it was their own government creating the barriers.

For what it's worth, my personal PayPal account, to which I accept "donations" for my work on jailbroken iPhones on my website, saurik.com, was recently restricted for what sounds like very solar reasons. Rather than getting angry and throwing a public fit, I calmly assumed that there was some reason this happened. I then called PayPal and had an hour long conversation with one of their representatives, during which I was not angry and asked for help. I explained the sitauation, explained my confusion, and explicitly asked what I could so in this situation to have similar functionality to what I had previously. It was determined that the main issue was that I was using the term "Donate", which carries particular meanings and connotations. After having a rational discussion of various options, including using a different part of PayPal to handle these "contributions", it was determined that I could provide a custom button image that used my own text, an option he didn't suggest immediately because most of their users, especially of this feature, have no technical knowledge. I then updated my website with this new wording, and the support guy put it back into the queue for me to have their appeals department recheck it. After the call, I sent an email to the support department's "kudos" address, explaining how wonderful working with this representative that morning was, without first waiting to see if I got the result I wanted: if I didn't, it certainly wasn't his fault. Later that day, my account was reactivated, and I have had no troubles since. (Note: typed on my iPhone, so please excuse some shortness and typos. ;P)