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Comment by bcrescimanno | Hacker News Reader

PayPal employee here (and I'm hiring Node.js developers :P ).

I actually got two of these messages while I was out for the holiday break. I don't work on the team that handles invoicing; but, I (among others) made them aware of this issue and they are definitely working on a fix.

The challenge, of course, is that there are plenty of legitimate reasons for sending $0 invoices and we don't want to artificially make our product worse for our many legitimate customers by going too far in trying to stop this spam.

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Genuine question: What are the legitimate uses of $0 invoices? The only thing I can think of is a product that usually costs money (and thus has an invoice workflow), but has been marked as free for some promotion.

It is very common to send $0 invoices. Some instances I can think of are receiving replacement goods / tracking if a service was rendered but not billable / making sure an account is zero'ed and you are fully paid up / etc

In the case of periodic invoicing but you haven't crossed into the billable threshold.

Let's say you get 2 hrs of support per month free, after that it costs $100. If you don't use the full 2 hrs, you'd get a $0 invoice - but there may still be detail and record of work performed (which you would want)

I sold a product and it was paid for by gift certificate or a special promo. I want to send a $0.00 invoice for the customer to see it and enjoy the feeling (Sweet! Free jerky/flowers/socks). It's great marketing and the customer will remember you the next time they want some jerky/flowers/socks.

It seems like only allowing a zero-dollar invoice after two parties have conducted another non-zero legitimate transaction might be a solution.

I can see a lot of cases where you have a $0 legitimate transaction.

That require PayPal?

Don't know if you can answer this: Why can I venmo people money instantly and paypal holds my money for days or weeks at a time?

Holding onto funds is how you mitigate risk as a bank or money transmitter.

Do you think they're running loads of security tests all the while or something? I'd imagine a majority (if not all) of the checks are done up front- especially given it's 2015.

Pretty sure they get a nice bump on their balance sheet for cash "in-transit" - and keeping the timeframe to 3-5 business days only magnifies that effect.

It's not about balance sheets, it's about having time to cope with any unexpected problems with the transaction, like fraud.

It's frustrating, and ideally not necessary, but it's essentially a safety net for the middle party.

You can not venmo money instantly. The UI makes it seem that way, but it takes a few days for payment to process and as such, Venmo has become a target for scams: http://time.com/money/4036511/venmo-more-check-than-cash/

So do not use Venmo for commercial transactions (buying things of Craiglist for example) and do not assume the money transfers immediately.

Also shame on Venmo for misleading their users; they should do a better job of explaining how the transfer actually works.

I only use it to transfer money between myself and friends. The most time I've ever had to wait to get money from venmo to bank is 24 hours.

the longest I've had to wait from Paypal is 24 DAYS

This is a bit misleading - PayPal's 21-day hold only applies if you received the funds as payment for goods and services. Even in that case, the funds can be expedited to release in 3-5 days once the buyer marks the item as received. It's more for buyer protection than anything.

If you're in the US and receive money via a "Friends and Family" transfer, it's just as 'instant' as Venmo.

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