As has been pointed out elsewhere, PayPal has an explicit policy about how they handle presales. Why can't I turn your argument around and say that if somebody doesn't like that policy, the onus is on them to not use PayPal?
I don't grant your premise that crowdfunding constitutes "presales."
Crowdfunding is an inherently speculative activity, a way to invest in a team with the hopes that they will create a product that you'd like to see in the world. Trying to fit Indiegogo into a presales model to justify PayPal's outrageous behavior here is a Procrustean approach that helps no one.
That's even worse than engaging in presales! It's practically fucking gambling the way you describe it, why the fuck would Paypal be enticed by that subtle shift in framing?
Yeah, it's "gambling" the way donating to an artist you like is gambling.
And who's trying to entice them? Again, if doing business with Indiegogo projects is incompatible with Paypal's risk profile they shouldn't do business with Indiegogo projects. That seems straightforward.
Bizarre to think we should be sympathizing with, enticing, or otherwise fellating PayPal in this situation.
Bizarre to think we should be sympathizing with, enticing, or otherwise fellating PayPal in this situation.
While I understand how easy it is to sympathize with the merchant here, as none of us will ever be payment processors, the reality is that the sum of your suggestions or assertions, if explored just as a thought experiment, quickly lead to a world where nobody can do payment processing without imposing absurdly high fees. Of course we can all see how unfair it seems to have all this money promised by seemingly wide-eyed and clear-minded open source software supporters. But Paypal has millions of clients and has to act in a way that generalizes across all of them, and which requires the least amount of trust to be placed in those clients. The only argument that Mailpile has is "but we're not evil," which is true, but still insufficient.
The other thing is, things don't work like that in the real world. If you go to court over this, the judge will check the material evidence (for example, that MailPile's page says they will deliver a beta by Jan2014) and will want to know if that was delivered.
>Crowdfunding is an inherently speculative activity,
Crowdfunding is only popular because it's got a high success rate though. If only 50% of projects succeeded and provided rewards, and 50% took your money and ran, how many supporters do you really think would be left?
Because PayPal's job is simply do deliver money from Party A to Party B. It's not their job to worry about how the money is used, the USPS does not audit the check your Grandma sent for your birthday.
Crowdsourcing is a gift, like a donation to PBS, where you might get a coffee mug, but if PBS decides to to stop showing Downton Abbey, you can't rescind your donation.
If PayPal has a problem with charge backs, they could simply stop taking payments for indiegogo projects (which its indiegogo's job to vet projects, not PayPal's) or put in big fat letters that THIS IS A NON-SALE OF GOODS TRANSACTION AND ABSOLUTELY NO CHARGE BACKS WILL BE ALLOWED FOR MONEY SENT TO THIS ACCOUNT AFTER FUNDS HAVE BEEN PROCESSED before they click the final confirmation button. Which is basically in writing already when you agree to send funds to indiegogo or Kickstarter. Problem solved. If you have a problem with projects not delivering, don't donate, take it up with indiegogo, or take it to small claims court.
Because PayPal's job is simply do deliver money from Party A to Party B.
The problem is that PayPal is not dealing with real money but with credit cards. AFAIK, companies like Western Union don't have such onerous restrictions because they accept cash or as-good-as-cash.
...ABSOLUTELY NO CHARGE BACKS WILL BE ALLOWED...
Credit cards fundamentally allow chargebacks; you can't turn them off. If you want to do business with no chargebacks you cannot accept credit cards either directly or indirectly.
> Credit cards fundamentally allow chargebacks; you can't turn them off. If you want to do business with no chargebacks you cannot accept credit cards either directly or indirectly.
So why is this not a problem for IGG? Since it obviously isn't - they cash out 15 days after funding closes. If the difference is that IGG takes a higher cut, then fair enough, let PayPal take a higher cut.
If the difference is that IGG takes a higher cut, then fair enough, let PayPal take a higher cut.
So you're asking PayPal to create a new level of service. (They probably won't, but their business is up to them.) That's fine, but you[1] should probably do that before using PayPal. And if PayPal doesn't create the new service you want, don't use PayPal.
[1] By "you" I really mean anyone who's crowdfunding.
> So you're asking PayPal to create a new level of service.
No, I'm just saying that the problem seems not to be a fundamental one. And the point here is that PP does accept payments on behalf of IGG. If I decide to fund a campaign, one of the payment options is PayPal (obviously that can be configured and turned off, since it's off for mailpile atm). The funds donated to mailpile via PayPal were donated via the IGG website. That means to me, that PayPal is well aware that the user is trying to fund a risky endeavour, since by definition all IndieGoGo campaigns are presale and likely to fail.
What I don't get here is: Why does PayPal as Payment Provider for IndieGoGo suddenly cop out and say "My dear, but that's too risky. I'll freeze the funds."
It IS a fundamental one. Most of your comments center on "why it's not a problem for IGG" while failing to understand the risks involved (and the risk mitigation actions taken).
ACH also has chargebacks. Also, I think one of the merits of PayPal is its simplicity, so having to track the difference between "chargebackable money" and "real money" in every account would add significant complexity. ("I have plenty of money in my PayPal account, why can't I spend it at this particular merchant?" "Sorry, you have fake money but the merchant wants real money.")
