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Hmm, all sounds a bit strange. While I don't approve of PayPal freezing payment's I can kind of get it with a conference which may or may not take place. They

Hmm, all sounds a bit strange. While I don't approve of PayPal freezing payment's I can kind of get it with a conference which may or may not take place. They need to protect themselves from having to hand out potentially thousands of dollars in compensation. What I don't get is why they would freeze an account getting donations. It is a donation. You are not paying for a service which may or may not arrive. Seem's very very strange.

dangrossman 15y ago
Money laundering. Selling illegal products or services in the guise of donations. Posing as an organization you're not even affiliated with to ask for those donations. Just because someone, who PayPal only knows as a name and an e-mail address, claims to be taking donations does not mean that's actually what's going on. When those donations go from $0 to $45,000 in a few days, it behooves them to identify that customer and check out exactly where all that money is coming from and what risk is associated with it. Even if they are bonafide donations, if there are expectations attached to those funds (that the company is going to build a product or perform a specific service, or put it towards a certain cause) and there's a risk those expectations won't be met, then there's a risk for PayPal that some of those donors are going to be upset and do something about it -- like cry fraud and charge back the payments. PayPal has to carefully manage its chargeback rate like every other merchant.
- kseudo 15y ago
  How do flattr get around this problem? They use paypal and it looks like they could be used for money laundering
  - dangrossman 15y ago
    By not having a huge spike in volume on a new account, providing information about the business to PayPal at some point, and by having a track record of low risk. It's not a problem to open a PayPal account and start accepting payments, it's only a problem to do that, not have any verified information in your account yet, then also do something to raise red flags. And for most people, even when that happens, once you give PayPal enough info to convince them you're not doing something shady, they'll unfreeze the account and you take payments without a problem for years after.
- kseudo 15y ago
  How do flattr get around this problem? They use paypal and it looks like they could be used for money laundering

dangrossman 15y ago

Money laundering. Selling illegal products or services in the guise of donations. Posing as an organization you're not even affiliated with to ask for those donations. Just because someone, who PayPal only knows as a name and an e-mail address, claims to be taking donations does not mean that's actually what's going on. When those donations go from $0 to $45,000 in a few days, it behooves them to identify that customer and check out exactly where all that money is coming from and what risk is associated with it. Even if they are bonafide donations, if there are expectations attached to those funds (that the company is going to build a product or perform a specific service, or put it towards a certain cause) and there's a risk those expectations won't be met, then there's a risk for PayPal that some of those donors are going to be upset and do something about it -- like cry fraud and charge back the payments. PayPal has to carefully manage its chargeback rate like every other merchant.

kseudo 15y ago
How do flattr get around this problem? They use paypal and it looks like they could be used for money laundering
- dangrossman 15y ago
  By not having a huge spike in volume on a new account, providing information about the business to PayPal at some point, and by having a track record of low risk. It's not a problem to open a PayPal account and start accepting payments, it's only a problem to do that, not have any verified information in your account yet, then also do something to raise red flags. And for most people, even when that happens, once you give PayPal enough info to convince them you're not doing something shady, they'll unfreeze the account and you take payments without a problem for years after.
kseudo 15y ago
How do flattr get around this problem? They use paypal and it looks like they could be used for money laundering