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Comment by EvilTrout | Hacker News Reader

I run a browser based MMO that once upon a time earned a fair amount of money (not at Minecraft's astonishing levels though!) and Paypal is my only method of payment. The first time I made a large withdrawal (10s of thousands) they did something similar.

I think people are being very knee-jerk with their reactions about all of this. Yes, it's annoying to have your money frozen temporarily, but Paypal is basically on the line for all of that money if it turns out to be fraudulent. All they need is a series of business documents proving you really are who you say you are, and then they will hand over the money.

Let's face it, few people show up out of nowhere and earn a million dollars in a month!

Notch even knows this, if you read his blog post he says he's sure it'll get sorted out. Once you go through this process once they will not do it again.

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It sounds like they screwed you too, and your defending them?

It sound suspiciously like they just want to keep the money for as long as possible. Collecting interest on your assets is a clear profit motive.

I don't consider myself screwed at all. They held my money until I gave them proper documentation. When you run a business this kind of thing happens all the time. Just paying taxes to the government was way more complicated and intrusive.

Yes they can earn interest on money, but it's much more likely to me that they are covering their asses about the money rather than earning a small amount of interest on it.

Paypal has to deal with a lot of fraud. If you listen to the owners in interviews they say they lost a ridiculous amount of money in the early years to fraudulent users. It is reasonable for them, in my opinion, to make sure the money was owed to you before giving it to you.

In my ING Direct account (savings) I earn 1.1% APY currently, on 600.000 that is 6.600, that is 550 a month. If they freeze your accounts for two months, they have "earned" 1.100.

Now think of the amount of money going through paypal or sitting in paypal accounts, that is a fair chunk of change.

You are only thinking this from the point of view of a software merchant, with low expenses. They can easily wait a few more months for the check to clear, but what if you are selling something that costs a significant portion of the sale price to make?

Plenty of healthy businesses would either go bankrupt or have to delay shipment (which would royally piss off the customers, because from their point of view, they already paid...) if the money paid by customers suddenly took more than a week to arrive.

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