8 ms·

How PayPal could have killed an independent conference

110 points by ailon 15y ago

pavel_lishin 15y ago
> "I knew PayPal couldn't be trusted, but I used them anyway, and they shafted me, just like I thought they would!" He only froze my money because he loves me, he won't do it again, I promise!
- jpallen 15y ago
  > WHY From my experience in the UK it's the only option for accepting payment that doesn't have the serious admin and financial outlay of getting set up with a proper merchant account. Perhaps in this case going with EventBrite from the beginning would have made more sense but that's only an easy call to make in hindsight. Edit: You seem to have changed your comment. Consider this a reply to the underlying message of your sarcasm.
  - pavel_lishin 15y ago
    (Sorry, I thought I ninja-edited quickly enough.) How serious is the admin and financial outlay? I want to say that it would be worth it to avoid the risk of Paypal freezing your funds (or worse), but that's a hard call to make without knowing exactly what the costs would be.
    - jpallen 15y ago
      It's difficult/impossible to get a merchant account without a previous trading history and money to show off. The financial spend isn't too bad, but from what I can tell you need to have some sizeable accounts before you can get one. Basically they're aimed at the larger business end of things, which makes small projects that need online transactions a non-starter. (I tried and failed to set up a merchant account and instead had to settle for PayPal as the only other option)
  - ajanuary 15y ago
    I've been involved in small-medium events run in the UK that used Google Checkout. I don't know the details involved though.
- mtogo 15y ago
  Paypal is often the only option. Nobody wants to use paypal, they're forced to because paypal is all they can afford.
ichilton 15y ago
I've seen a number of conference organisers complain of this so it must happen often!
- pavel_lishin 15y ago
  > I've seen a number of conference organisers complain of this so it must happen often! That's not really a valid argument. You don't know how many conferences used Paypal and went off without a hitch. Not many people are going to write a blog post saying, "We used PayPal, and it went fine!" - and of those, fewer still would hit the HN front page.
timjahn 15y ago
We use Eventbrite for all our Entrepreneurs Unpluggd events, and while they're not multi-day conferences, I still think Eventbrite is the best platform for any size event to use for ticket sales, registration, waiting list, and all that jazz. Never once had an issue with them on any level. And no, I don't work for them or get paid by them in any way. They just have a kick ass product. :) EDIT: The reason I'm even saying this is the author mentions in his post that he switched from PayPal to Eventbrite.
- benatkin 15y ago
  No, he says he started up a second EventBrite listing for the conference. EventBrite lets you use your own PayPal account. http://www.eventbrite.com/paypal-info http://www.eventbrite.com/paypal-info Maybe EventBrite should warn its users about PayPal's policies.
  - timjahn 15y ago
    You're right. He said he was switching from PayPal as the payment processor to Eventbrite. We used PayPal for our first event, but their extra cut on top of Eventbrite's made little sense, so we too switched to using Eventbrite's processor and haven't looked back.
    - benatkin 15y ago
      You have to wait until the event is over to get the money, right? It seemed to me that with PayPal, if it didn't get frozen, the author of the article would have gotten his money before the event started and been able to use it to pay for the event's expenses.
      - timjahn 15y ago
        Yes, you get the money after the event is over. 5 days after, actually, as that's the timeframe Eventbrite gives you to handle any refunds.
nhebb 15y ago
It's been said before, but it's worth repeating. Conferences are a high risk business operation. For every SXSW, there's a thousand "Learn to Buy Real Estate with No Money Down" conferences at the Ramada Inn next to the airport. Paypal is not in the business of assuming your risk. They are in the business of processing payments while mitigating their own.
- pavel_lishin 15y ago
  Whatever happened to "caveat emptor"? If you're attending a real estate conference at a Ramada Inn, you weren't defrauded - you're just an idiot.
  - dspillett 15y ago
    > Whatever happened to "caveat emptor"? If you're attending a real estate conference at a Ramada Inn, you weren't defrauded - you're just an idiot. What happened is that "you were an idiot" is not accepted by many any more. Many people don't expect to pay for their mistakes, even if that means someone else paying instead, and the worst people for this are the sort of people who make a lot of mistakes. They'll argue, they'll fight, they'll try force a chargeback on the credit card payment, they'll do anything they can to avoid taking the cost of a mistake - if nothing else works they just keep on and on and on and on and on at everyone involved until someone gives them a full refund just to make them shut up and go away (as the admin time arguing back can become more expensive than the refund and taking them to court for harassment is hardly a convenient option). Some will even sometimes try taking you and/or the payment processor to court. Yes the case will probably be laughed out, but someone has to go through all the hassle until it gets laughed out, then (unless you are in a "loser pays" country) counter-sue to get your legal costs back. And then there is the negative PR they can try to drum up - if they are successful here that can be much more costly than a refund. Caveat emptor doesn't work if the emptor is a very loud, very persistent, fuckwit with entitlement issues (or just a scammer). Which unfortunately is a large enough segment of the general population to be a significant problem.
  - nhebb 15y ago
    If the buyer needs to be aware, then so does Paypal - and they take steps accordingly. I feel sorry for anyone whose account has been frozen by Paypal, but if they didn't take steps to manage their risks, they would experience more fraud. And if they experienced more fraud, they would pass those costs along to everyone.
ig1 15y ago
Paypal classes events as high-risk transactions (as they require people to pay upfront often far in advance of the event) so you're at much more risk of being suspended if you breach their risk thresholds. Imagine if you're a fraudster, you've knocked up a fake event and you've sold $10k-$20k in tickets, you could withdraw the money and disappear before the date of the event. Now Paypal are on the hook for the money, when they get creditcard charge-backs it comes out of Paypal's account and not the fraudsters. Does anyone consider it reasonable that Paypal take this risk ? - the reason for the 90 day limit is that's the length of time most consumers have to request a credit card chargeback. Paypal is simply protecting themselves. If you're engaged in high-risk transactions you're much better off going with a specialist provider (i.e Amiando or Eventbrite in this case) as they have risk fraud models designed to handle the specific risk factors.
- SoftwareMaven 15y ago
  Then PayPal should provide a way to pre-mitigate the risk. For instance, they could require a bond before ticket sales start. Rather than screwing legitimate users, there are other ways to solve this problem. The short is that PayPal just doesn't care about small users. If they did, these problems would be solved.
  - ig1 15y ago
    Paypal is primarily about small users, they're a long tail business. Any large business would just get a merchant account. What Paypal is however is a mass-market product aimed at low-risk transactions. They don't care about dealing with special case high-risk transactions, that's a fundamentally different business model which they don't want to go after. It's perfectly reasonable for Paypal to decide their own business model.
    - zyphlar 15y ago
      That they let you accrue thousands or even millions in charges and then lock your account unexpectedly with poor customer service is the rub. There's no warning, just a surprise logistical nightmare that they benefit enormously from.
Shenglong 15y ago
Paypal also has terrible customer service. Every time I call them, I get pushed around to people who barely speak English, and just repeat things they see on a sheet of paper. To add to this, think about charge backs. Paypal doesn't even make an effort to fight for you, in the case of a Charge Back. I had a charge back NINE months after a transaction for 2 $500 amounts. Ouch. The worst part is... if you want to dispute the charge back, they charge you ANOTHER fee to do it. Paypal has been an absolute nightmare - and if there was an alternative, I'd jump on it right away.
- qeorge 15y ago
  Do you have an account manager? If not, you may want to request one. Our experience with PayPal has been fine since we started directing inquiries through our AM vs normal support.
  - Shenglong 15y ago
    That certain project is over - but I'll keep that in mind. Thanks.
  - eli 15y ago
    Seconding that. I certainly would have dropped paypal long ago if it were not for our account rep.
Astrohacker 15y ago
If you accept bitcoin, then there is no third party that can freeze your account.
- pavel_lishin 15y ago
  That's also true if you accept payment in soiled panties or puka shells, but the trick is convincing everyone involved - the venue, the speakers, the staff, and the merchants you're relying on to print t-shirts and the like - to accept this as a form of payment. Praytell, what venue accepts payment in bitcoin?
  - mcantelon 15y ago
    It is true that Bitcoin adoption levels don't make it feasible to rely on completely for conference registration, but it makes sense to start offering it as an option so we can gradually grow an alternative to Paypal, who has been pulling these shenanigans for years. It usually takes a day or two to convert Bitcoin to currency so there isn't a big reason not to offer it as a payment option.
    - pavel_lishin 15y ago
      By offering it as an option, you no longer have the option to not rely on it completely. What happens when everyone decides to pay in Bitcoins? I don't think the caterers will accept them as a form of payment - they'll echo Doug Shaftoe's sentiment: " Doug’s regained his composure now, and is back to belly laughs. "What’ll that buy me? Pictures of naked girls on the World Wide Web?" "
      - mcantelon 15y ago
        Ideally you automatically eliminate Bitcoin as a payment option in the online interface when a certain threshold is passed (or just do this manually if need be). The odds of this happening, however, are slim to none as adoption is not there yet. Regarding caterers, as I said in the previous comment in this thread it usually takes 1-2 days to withdraw fiat currency from a Bitcoin exchange. Really not a problem.
known 15y ago
Shun Paypal. Use Hawala. Save your time and money.
2arrs2ells 15y ago
"So, ironically, because I didn't trust them, they weren't able to ruin my conference." This is not in the least bit ironic.
michaelpinto 15y ago
You know I keep seeing tech types going on about how much they hate PayPal - so why doesn't somebody do a startup to go head to head with them? I realize I'm just a humble designer, but I can tell that even from a usability point of view they're very vulnerable.
- geoffschmidt 15y ago
  Stripe: http://techcrunch.com/2011/03/28/stealth-payment-startup-stripe-paypal/ http://techcrunch.com/2011/03/28/stealth-payment-startup-str... WePay: http://techcrunch.com/2010/10/26/wepay-ice-paypal/ http://techcrunch.com/2010/10/26/wepay-ice-paypal/ Both have Paypal founders among their investors.
  - pbhjpbhj 15y ago
    https://stripe.com/ https://stripe.com/ not live yet https://www.wepay.com/ https://www.wepay.com/ - 3.5% fee, 50c min, US only. Any one got a suggestion for the UK?
ltamake 15y ago
PayPal is a horrible company. They freeze accounts, hold money hostage (pretty sure illegally), refuse to delete user data (illegal in the UK), and screw smaller users over by forcing them to add bank accounts or sign up for their shitty credit card just to verify that their account is real.
alexmunroe 15y ago
I've been running an event in the UK for around 4 years now. We have around 1200 attendees and push around £55,000 (around $90,000) through each year. We had a few small issues the first year where paypal froze our account until additional verification had taken place but since then and three years of continuous use we haven't had a single problem. However we've also never had a chargeback so I would imagine that's heavily worked into their risk calculations.
ChuckMcM 15y ago
Seems to be another case of 'Paypal isn't a bank.' And while the Author seems to understand that (and hence didn't keep a lot of money under their control) it is something a number of people 'miss.' What I find most interesting is that a lot of people would like Paypal to be a bank (or certainly more bank like) and complain bitterly when it comes up short, and yet few actual banks seem able or willing to extend their business model to include a lighter weight payments services. The discontinuity in the market (a demand for services served poorly because the best entity to serve it doesn't enter the market) is one of those things that makes me wonder if anyone is paying attention or not.

110 points by ailon 15y ago

> "I knew PayPal couldn't be trusted, but I used them anyway, and they shafted me, just like I thought they would!" He only froze my money because he loves me, he won't do it again, I promise!

jpallen 15y ago
> WHY From my experience in the UK it's the only option for accepting payment that doesn't have the serious admin and financial outlay of getting set up with a proper merchant account. Perhaps in this case going with EventBrite from the beginning would have made more sense but that's only an easy call to make in hindsight. Edit: You seem to have changed your comment. Consider this a reply to the underlying message of your sarcasm.
- pavel_lishin 15y ago
  (Sorry, I thought I ninja-edited quickly enough.) How serious is the admin and financial outlay? I want to say that it would be worth it to avoid the risk of Paypal freezing your funds (or worse), but that's a hard call to make without knowing exactly what the costs would be.
  - jpallen 15y ago
    It's difficult/impossible to get a merchant account without a previous trading history and money to show off. The financial spend isn't too bad, but from what I can tell you need to have some sizeable accounts before you can get one. Basically they're aimed at the larger business end of things, which makes small projects that need online transactions a non-starter. (I tried and failed to set up a merchant account and instead had to settle for PayPal as the only other option)
- ajanuary 15y ago
  I've been involved in small-medium events run in the UK that used Google Checkout. I don't know the details involved though.
mtogo 15y ago
Paypal is often the only option. Nobody wants to use paypal, they're forced to because paypal is all they can afford.

ichilton 15y ago

I've seen a number of conference organisers complain of this so it must happen often!

pavel_lishin 15y ago
> I've seen a number of conference organisers complain of this so it must happen often! That's not really a valid argument. You don't know how many conferences used Paypal and went off without a hitch. Not many people are going to write a blog post saying, "We used PayPal, and it went fine!" - and of those, fewer still would hit the HN front page.

timjahn 15y ago

We use Eventbrite for all our Entrepreneurs Unpluggd events, and while they're not multi-day conferences, I still think Eventbrite is the best platform for any size event to use for ticket sales, registration, waiting list, and all that jazz. Never once had an issue with them on any level. And no, I don't work for them or get paid by them in any way. They just have a kick ass product. :) EDIT: The reason I'm even saying this is the author mentions in his post that he switched from PayPal to Eventbrite.

benatkin 15y ago
No, he says he started up a second EventBrite listing for the conference. EventBrite lets you use your own PayPal account. http://www.eventbrite.com/paypal-info http://www.eventbrite.com/paypal-info Maybe EventBrite should warn its users about PayPal's policies.
- timjahn 15y ago
  You're right. He said he was switching from PayPal as the payment processor to Eventbrite. We used PayPal for our first event, but their extra cut on top of Eventbrite's made little sense, so we too switched to using Eventbrite's processor and haven't looked back.
  - benatkin 15y ago
    You have to wait until the event is over to get the money, right? It seemed to me that with PayPal, if it didn't get frozen, the author of the article would have gotten his money before the event started and been able to use it to pay for the event's expenses.
    - timjahn 15y ago
      Yes, you get the money after the event is over. 5 days after, actually, as that's the timeframe Eventbrite gives you to handle any refunds.

nhebb 15y ago

It's been said before, but it's worth repeating. Conferences are a high risk business operation. For every SXSW, there's a thousand "Learn to Buy Real Estate with No Money Down" conferences at the Ramada Inn next to the airport. Paypal is not in the business of assuming your risk. They are in the business of processing payments while mitigating their own.

pavel_lishin 15y ago
Whatever happened to "caveat emptor"? If you're attending a real estate conference at a Ramada Inn, you weren't defrauded - you're just an idiot.
- dspillett 15y ago
  > Whatever happened to "caveat emptor"? If you're attending a real estate conference at a Ramada Inn, you weren't defrauded - you're just an idiot. What happened is that "you were an idiot" is not accepted by many any more. Many people don't expect to pay for their mistakes, even if that means someone else paying instead, and the worst people for this are the sort of people who make a lot of mistakes. They'll argue, they'll fight, they'll try force a chargeback on the credit card payment, they'll do anything they can to avoid taking the cost of a mistake - if nothing else works they just keep on and on and on and on and on at everyone involved until someone gives them a full refund just to make them shut up and go away (as the admin time arguing back can become more expensive than the refund and taking them to court for harassment is hardly a convenient option). Some will even sometimes try taking you and/or the payment processor to court. Yes the case will probably be laughed out, but someone has to go through all the hassle until it gets laughed out, then (unless you are in a "loser pays" country) counter-sue to get your legal costs back. And then there is the negative PR they can try to drum up - if they are successful here that can be much more costly than a refund. Caveat emptor doesn't work if the emptor is a very loud, very persistent, fuckwit with entitlement issues (or just a scammer). Which unfortunately is a large enough segment of the general population to be a significant problem.
- nhebb 15y ago
  If the buyer needs to be aware, then so does Paypal - and they take steps accordingly. I feel sorry for anyone whose account has been frozen by Paypal, but if they didn't take steps to manage their risks, they would experience more fraud. And if they experienced more fraud, they would pass those costs along to everyone.

ig1 15y ago

Paypal classes events as high-risk transactions (as they require people to pay upfront often far in advance of the event) so you're at much more risk of being suspended if you breach their risk thresholds. Imagine if you're a fraudster, you've knocked up a fake event and you've sold $10k-$20k in tickets, you could withdraw the money and disappear before the date of the event. Now Paypal are on the hook for the money, when they get creditcard charge-backs it comes out of Paypal's account and not the fraudsters. Does anyone consider it reasonable that Paypal take this risk ? - the reason for the 90 day limit is that's the length of time most consumers have to request a credit card chargeback. Paypal is simply protecting themselves. If you're engaged in high-risk transactions you're much better off going with a specialist provider (i.e Amiando or Eventbrite in this case) as they have risk fraud models designed to handle the specific risk factors.

SoftwareMaven 15y ago
Then PayPal should provide a way to pre-mitigate the risk. For instance, they could require a bond before ticket sales start. Rather than screwing legitimate users, there are other ways to solve this problem. The short is that PayPal just doesn't care about small users. If they did, these problems would be solved.
- ig1 15y ago
  Paypal is primarily about small users, they're a long tail business. Any large business would just get a merchant account. What Paypal is however is a mass-market product aimed at low-risk transactions. They don't care about dealing with special case high-risk transactions, that's a fundamentally different business model which they don't want to go after. It's perfectly reasonable for Paypal to decide their own business model.
  - zyphlar 15y ago
    That they let you accrue thousands or even millions in charges and then lock your account unexpectedly with poor customer service is the rub. There's no warning, just a surprise logistical nightmare that they benefit enormously from.

Shenglong 15y ago

Paypal also has terrible customer service. Every time I call them, I get pushed around to people who barely speak English, and just repeat things they see on a sheet of paper. To add to this, think about charge backs. Paypal doesn't even make an effort to fight for you, in the case of a Charge Back. I had a charge back NINE months after a transaction for 2 $500 amounts. Ouch. The worst part is... if you want to dispute the charge back, they charge you ANOTHER fee to do it. Paypal has been an absolute nightmare - and if there was an alternative, I'd jump on it right away.

qeorge 15y ago
Do you have an account manager? If not, you may want to request one. Our experience with PayPal has been fine since we started directing inquiries through our AM vs normal support.
- Shenglong 15y ago
  That certain project is over - but I'll keep that in mind. Thanks.
- eli 15y ago
  Seconding that. I certainly would have dropped paypal long ago if it were not for our account rep.

Astrohacker 15y ago

If you accept bitcoin, then there is no third party that can freeze your account.

pavel_lishin 15y ago
That's also true if you accept payment in soiled panties or puka shells, but the trick is convincing everyone involved - the venue, the speakers, the staff, and the merchants you're relying on to print t-shirts and the like - to accept this as a form of payment. Praytell, what venue accepts payment in bitcoin?
- mcantelon 15y ago
  It is true that Bitcoin adoption levels don't make it feasible to rely on completely for conference registration, but it makes sense to start offering it as an option so we can gradually grow an alternative to Paypal, who has been pulling these shenanigans for years. It usually takes a day or two to convert Bitcoin to currency so there isn't a big reason not to offer it as a payment option.
  - pavel_lishin 15y ago
    By offering it as an option, you no longer have the option to not rely on it completely. What happens when everyone decides to pay in Bitcoins? I don't think the caterers will accept them as a form of payment - they'll echo Doug Shaftoe's sentiment: " Doug’s regained his composure now, and is back to belly laughs. "What’ll that buy me? Pictures of naked girls on the World Wide Web?" "
    - mcantelon 15y ago
      Ideally you automatically eliminate Bitcoin as a payment option in the online interface when a certain threshold is passed (or just do this manually if need be). The odds of this happening, however, are slim to none as adoption is not there yet. Regarding caterers, as I said in the previous comment in this thread it usually takes 1-2 days to withdraw fiat currency from a Bitcoin exchange. Really not a problem.

known 15y ago

Shun Paypal. Use Hawala. Save your time and money.

2arrs2ells 15y ago

"So, ironically, because I didn't trust them, they weren't able to ruin my conference." This is not in the least bit ironic.

michaelpinto 15y ago

You know I keep seeing tech types going on about how much they hate PayPal - so why doesn't somebody do a startup to go head to head with them? I realize I'm just a humble designer, but I can tell that even from a usability point of view they're very vulnerable.

geoffschmidt 15y ago
Stripe: http://techcrunch.com/2011/03/28/stealth-payment-startup-stripe-paypal/ http://techcrunch.com/2011/03/28/stealth-payment-startup-str... WePay: http://techcrunch.com/2010/10/26/wepay-ice-paypal/ http://techcrunch.com/2010/10/26/wepay-ice-paypal/ Both have Paypal founders among their investors.
- pbhjpbhj 15y ago
  https://stripe.com/ https://stripe.com/ not live yet https://www.wepay.com/ https://www.wepay.com/ - 3.5% fee, 50c min, US only. Any one got a suggestion for the UK?

ltamake 15y ago

PayPal is a horrible company. They freeze accounts, hold money hostage (pretty sure illegally), refuse to delete user data (illegal in the UK), and screw smaller users over by forcing them to add bank accounts or sign up for their shitty credit card just to verify that their account is real.

alexmunroe 15y ago

I've been running an event in the UK for around 4 years now. We have around 1200 attendees and push around £55,000 (around $90,000) through each year. We had a few small issues the first year where paypal froze our account until additional verification had taken place but since then and three years of continuous use we haven't had a single problem. However we've also never had a chargeback so I would imagine that's heavily worked into their risk calculations.

ChuckMcM 15y ago

Seems to be another case of 'Paypal isn't a bank.' And while the Author seems to understand that (and hence didn't keep a lot of money under their control) it is something a number of people 'miss.' What I find most interesting is that a lot of people would like Paypal to be a bank (or certainly more bank like) and complain bitterly when it comes up short, and yet few actual banks seem able or willing to extend their business model to include a lighter weight payments services. The discontinuity in the market (a demand for services served poorly because the best entity to serve it doesn't enter the market) is one of those things that makes me wonder if anyone is paying attention or not.