PayPal freezes account of Minecraft developer with over €600,000 in account

[Trippy]

http://notch.tumblr.com/post/1096322756/working-on-a-friday-update-crying-over-paypal

Alpha copies are selling for €9.95 so he's sold over 60,000 licenses so far. Not bad for a (very buggy) alpha.

[Velorath]

http://notch.tumblr.com/post/1096322756/working-on-a-friday-update-crying-over-paypal

Alpha copies are selling for €9.95 so he's sold over 60,000 licenses so far. Not bad for a (very buggy) alpha.

According to the stats on the Minecraft website, over 130,000 people have bought the game.

[fuser]

Why do people still use paypal for sales? This isn't the first or the last time they have had shady dealings with vendors.

[Xuri]

Maybe PayPal are freezing his money for a while just so they can get some interest on it =P

[Mavor]

 And this is why no company with a brain uses paypal as anything more then a transitory account that immediately forwards money to a real bank account. Paypal is not governed by any sort of financial body and so that money is going to remain frozen for the next little while.

 I wonder how much interest that will create for paypal while they dilly dally? :)

[NiX]

And this is why no company with a brain uses paypal as anything more then a transitory account that immediately forwards money to a real bank account. Paypal is not governed by any sort of financial body and so that money is going to remain frozen for the next little while.

 I wonder how much interest that will create for paypal while they dilly dally? :)

In Europe PayPal is registered as a bank. Not to mention their recent acquisition by eBay might make this work in his favor. No one wants to hear about the poor indie dev whose 600K was stolen for no good reason.

[Azazel]

hm. If he has 600k Euro, he can afford to learn from this and register as a proper business with a visa, etc online shopfront.

[ffc]

In Europe PayPal is registered as a bank. Not to mention their recent acquisition by eBay might make this work in his favor. No one wants to hear about the poor indie dev whose 600K was stolen for no good reason.

PayPal was purchased by eBay in ~2002.  PayPal shenanigans will continue.

[NiX]

In Europe PayPal is registered as a bank. Not to mention their recent acquisition by eBay might make this work in his favor. No one wants to hear about the poor indie dev whose 600K was stolen for no good reason.

PayPal was purchased by eBay in ~2002.  PayPal shenanigans will continue.

Whoops. Misread the date going from Google to the article.

[Sheepherder]

Heh.

My latest acquisitions from NCIX took 10 days for Paypal to process when the money was gone from my bank account the very next day, and approximately 10 minutes for some guy on their (Netlink/NCIX's) phone line to unfuck my order after I fucked it up taking advantage of the next week's set of deals.  How the fuck does anyone still deal with Paypal when they're that fucking incompetent?

[Ironwood]

And this is why no company with a brain uses paypal as anything more then a transitory account that immediately forwards money to a real bank account. Paypal is not governed by any sort of financial body and so that money is going to remain frozen for the next little while.

 I wonder how much interest that will create for paypal while they dilly dally? :)

[edit:] Just to clear things up: I withdraw everything from paypal every week. They limited my account just as sales started spiking, so this money has accumulated since they limited the account.

Holy fuck.

[Paelos]

Yeah this guy has essentially become a millionaire on this game. Good on him. Live the dream!

Also get it stable and I'll toss some cash at him.

[Krakrok]

How the fuck does anyone still deal with Paypal when they're that fucking incompetent?

Use a credit card. Then if there is ever a problem you have your credit card company do a chargeback. This allows you to bypass PayPal's broken problem resolution system.

[Sheepherder]

incompetent

Use a credit card.

 

[Chimpy]

He means IN paypal as a consumer I think.

You know, instead of having it tied directly to your bank account?

[NiX]

Paypal unlocked his account and now they're demanding a 5% reserve on every sale for 90 days. Oh Paypal!

[Fordel]

Paypal unlocked his account and now they're demanding a 5% reserve on every sale for 90 days. Oh Paypal!

I don't understand what this means?

[tgr]

They're keeping 5% of whatever comes in to that account for 90 days, so they can make more money off of him, is how I interpret it.

[Cadaverine]

They're keeping 5% of whatever comes in to that account for 90 days, so they can make more money off of him, is how I interpret it.

That would be correct.

If he's smart, he'll tell PP to pound sand, and pony up for some other solution that won't jerk him around like the dear folks at Paypal. 

[Soln]

he's got a couple of options:  https://payments.amazon.com/sdui/sdui/index.htm

[Azazel]

How the fuck does anyone still deal with Paypal when they're that fucking incompetent?

Use a credit card. Then if there is ever a problem you have your credit card company do a chargeback. This allows you to bypass PayPal's broken problem resolution system.

This. PayPal don't care about you or your bank if it's a fund transfer from your bank, but they care very much when your bank is wearing it's Credit Card Company hat.

[Azazel]

he's got a couple of options:  https://payments.amazon.com/sdui/sdui/index.htm

There's also Google Checkout. Not sure how it works exactly, but I've bought from Vendors that use it before.

[NiX]

That would be correct.

If he's smart, he'll tell PP to pound sand, and pony up for some other solution that won't jerk him around like the dear folks at Paypal. 

He just hired someone to work the business side of his company and they're looking at alternatives. He definitely wants to get away from PP.

[Fordel]

They're keeping 5% of whatever comes in to that account for 90 days, so they can make more money off of him, is how I interpret it.

Well while that is better then Paypal keeping all of it, that still sucks :(

[Chimpy]

If he was getting payments as simple person-to-person individual accounts and not set up as a business account, that is probably the real issue. Paypal does not charge processing fees on person-person 'cash' transactions, but they DO charge a small % of the transaction to the seller on business accounts (like a credit card company does). If it is in the 3% range that a lot of credit card companies charge, then you are looking at over $10,000 in lost transaction fees for him using a personal account to do what should have been done with a business account.

I am not a big fan of Paypal either, but my guess is that is what is going on.

[Ingmar]

They're keeping 5% of whatever comes in to that account for 90 days, so they can make more money off of him, is how I interpret it.

Well while that is better then Paypal keeping all of it, that still sucks :(

What it means is they are considering his business a 'high risk' one so they make him leave 5% of what he takes in, in the account for 90 days, to cover any risk they might incur if he suddenly disappears (which I have read somewhere or another is happening at a pretty high rate with small businesses and other online sellers.)

Paypal is responsible for paying chargebacks from customers, and because he was emptying his account every week while doing a large amount of business, he must have set of some red risk flags with them. Normally when they process a chargeback they would take it directly out of the merchant's account, but he was emptying it too quickly for that to be a reliable thing I'm guessing.

EDIT: And yes I would guess this also makes them some amount of interest income on the reserved funds, but I'm guessing the primary goal is to limit the amount they have to pay themselves in chargebacks against defunct sellers.

[eldaec]

I have no fucking idea why paypal doesn't have to be regulated as a bank in the US, the same way it does everywhere else.

EDIT: Oh, didn't realise this was outside the US, in that case, who knows, maybe paypal will get properly stomped on this time, we can but dream.

[Ingmar]

It is kind of mysterious yes - they're mostly treated like a 3rd party payment processor, except for some reason they can issue credit cards and you can leave money sitting around in an account with them.

[Chimpy]

Uhm....not to fall into politics here.

But in the last 15 years banks have really not been regulated much in the U.S.

[NiX]

Uhm....not to fall into politics here.

But in the last 15 years banks have really not been regulated much in the U.S.

I'm assuming in the U.S. your banks are covered by some kind of regulatory body that insures your money isn't just taken willy nilly.

[Yegolev]

Uhm....not to fall into politics here.

But in the last 15 years banks have really not been regulated much in the U.S.

I'm assuming in the U.S. your banks are covered by some kind of regulatory body that insures your money isn't just taken willy nilly.

Ostensibly.

[brellium]

It is kind of mysterious yes - they're mostly treated like a 3rd party payment processor, except for some reason they can issue credit cards and you can leave money sitting around in an account with them.

They don't issue the credit cards GEMB (General Electric Money bank) issues the card for them.

[fuser]

Ah so thats one of the reasons. Talking with a friend here who runs a small online business and paypal is the only one who allows international checkouts(besides Amazon UK). As a small business account he's had his frozen over a month due to a customer fraudulent complaint (note: that also blocks any future billing).

[shiznitz]

I am on Paypal's side on this.  They have exposure.  The benefits are lower processing fees to him.  A 5% holdback for 90 days is not insane. It is better than 3% of each transaction.  The guy can go where he wants but Paypal should not be condemned for implementing a reasonable safeguard against fraud.

[NiX]

I am on Paypal's side on this.  They have exposure.  The benefits are lower processing fees to him.  A 5% holdback for 90 days is not insane. It is better than 3% of each transaction.  The guy can go where he wants but Paypal should not be condemned for implementing a reasonable safeguard against fraud.

The issue is with how autonomous Paypal is when it comes to handling peoples money. There's no one above to slap them when they do something stupid like freeze an account and take the money (which has happened) without explanation. No body that handles as many transactions and idle cash as Paypal should have that power.