Warn HN: When PayPal doesn't know the meaning of "Donation"...

Paypal will let you do daily withdrawals. The magic word is "auto sweep". You have to call and ask for it.

I have used Paypal successfully for fourish years now. Not to ignore your experience, but if I listened to my buddies on the day after they were dumped I'd swear off speaking to young ladies, too.

BrainTree is not viable at your scale.

Do you mean you can do daily withdrawals even if you're not using your own name as the donation recipient, but rather the name of your website?

I don't think that metaphor fits at all, because this isn't about people swearing off an entire class of services ("women are evil : web-based payment companies are evil").

To better fit your metaphor, I'd say it's like having all your guy friends warn you that they each had a relationship with Jenny and she cheated on every single one of them, and you shrug your shoulders and say, "Well, she hasn't cheated on me yet, and besides, I think that was totally understandable behavior."

>they each had a relationship with Jenny and she cheated on every single one of them, and you shrug your shoulders

To be crass for a moment: If he's only bothered if Jenny puts out that night and not about a long term relationship, knowing that there are other girls he can sleep around with, then he wouldn't be bothered.

Tunnelling through the metaphor: If using auto-sweep he's only risking, it seems, one or two days of payments. When/If he gets cut off by PayPal then he can jump ship.

BrainTree is not viable at your scale.

More directly, Braintree will cost you a minimum of about $130 per month (with their vault service). Until you're doing a couple thousand in revenue per month, there are cheaper alternatives.

But you get something for that money - a great API.

You do NOT have to be a 501(c)3 to accept donations with Paypal. Just register as a regular business and use the donate button. What may have happened here is that you registered with PayPal as a "non-profit" to get the lower transaction fees, but that's NO-NO if you are not a 501(c)3.

Supporting documentation: https://merchant.paypal.com/cgi-bin/marketingweb?cmd=_render... Click on the pricing tab, then open up the "Standard Rates" section at the bottom. The relevant quote on this page about the donate button is this: "If you are not a 501(c)(3), you can still accept donations with our standard pricing."

I can second this based on my own exeprience.

A few months ago, I helped my son to set up a non-profit organization and a website to collect online donations (http://sujal.org), mostly from family and friends. I chose the non-profit option for the business type when the PayPal account was created, since the organization was registered as non-profit in my state and also because we intended to file for exempt status with the IRS (until we found that it costs $400 to do that, which is a story for another time.)

A few weeks later, PayPal suspended the account. I contacted PayPal and after a few days going back-and-forth, I was told to change the business type to something that is not non-profit, and also to add a disclaimer along with the donate button to convey that the donations are not tax-deductible (see the above link for exact text of the disclaimer if interested). After doing this, the account was restored.

Well give the guy back his money less the re-adjusted transaction fees. They just robbed this man of $2500.

This exact thing happened to me... I used pledgie + paypal to accept donations to help a friend out in Peru who's home had been devasted by flooding. Paypal froze my account, customer service wouldn't tell me what was up, only that I had to EMAIL the "Compliance Department" which doesn't do phone calls. The compliance department told me I needed to provide the paperwork to prove my non-profit status, which of course I could not do. I sent my friend the amount donated out of my own pocket since the money was locked down in paypal. After 3 months of emailing back and forth I finally got nasty with them and threatened all sorts of lawsuits etc etc. While they haven't reinstated my account they finally allowed me to withdrawl the money. That account is basically in a permanent restricted status and unusable.

PayPal is the new mafia.

According to this page <https://www.paypal.com/cgi-bin/webscr?cmd=xpt/Marketing/merc...; "you must have documented 501(c)(3) status or you will not receive the reduced nonprofit transaction fees."

Where does PayPal state that you must have 501(c)(3) status to accept donations? (I'm concerned because I do something similar to CompuerGuru--accept donations for free software via PayPal and have done so for years).

I read a lot about these stories with PayPal freezing accounts. Usually, it's with few grands in it.

Did anyone try small claims courts for it? From reading internet seems small claims courts have small fixed fee and if defendad (PayPal) will not appear, they automatically loose.

Probably, it's possible alternative to spending days on phone/email with PayPal, or paying lawyer tons of money?

I have diminishing amounts of sympathy for anyone with a recent PayPal sob story. There are ample enough warnings about doing business with them -- both here and elsewhere -- and there have been plenty of topics about alternatives.

If you choose to do business with them, you're choosing to take on a great amount of personal and business risk. Maybe that'll work out for you, maybe it won't. That's gambling.

Can we stop the PayPal complaint train now?

Can we stop the PayPal complaint train now?

If you have a viable alternative to suggest, then yes, it would be reasonable to tell people to stop whining. Given that PayPal is the only game in town, and that there is no obvious competitor for use by individuals and small companies, the complaints need to be shouted from rooftops.

Ask HN: what about WePay, is that a real competitor?

Complaining loudly and often is only effective if it's likely to create a different outcome. PayPal isn't going to change their business practices (people have been complaining about them for years, hence my fatigue over it); there has been an opportunity in this market for at least this long; and authorize.net and other similar services are available to anyone that wants to spend a little bit of effort integrating their API.

That's the last I'll say about this topic, because it's a waste of time.

Has anyone used WePay for collecting donations? I was considering it as an option for a project I was working on and I was wondering if anyone had first hand experience using it in comparison to PayPal...

No experience with them but the only problem I've read about was with WikiLeaks.

What's your jurisdiction? I'm not a fan of court, but it seems like this is the sort of thing small claims court is made for. They probably don't show up, you win a default judgment, and then you never use them again. Problem solved.

The last time I looked at PayPal's user agreements, they require you to agree to an arbitration procedure in any disputes. So you'd have to fight the validity of that agreement too.

(I'm not a lawyer, this isn't legal advice.)

Might be quite off-topic, but I want you to know that for international stuff Paypal has more value to me than Google checkout, as I don't have a credit card and Paypal works with my European bank account. It might be similar in several other countries, so that can be a reason for lower conversions with Google Checkout. Paypal in a lot of cases is my only online currency, alongside IDeal in the Netherlands (that works with my bank account as well).

It sounds like your problems are more to do with IRS/US financial regulations than with Paypal. I doubt Paypal invented the concept of 501(c). Disclaimer: I don't live in the US so maybe I am not aware of some subtlety here.

On a more general note, it boggles the mind why anything like 501(c) would even exist in the first place. Sounds like unnecessary, out-of-control beauraucracy.

I have some sympathy for Paypal here. They encounter a lot of fake charities, so the word "donation" is a red flag to them.

Exactly, it seems a lot of people don't understand what Paypal is. They're a high risk business, if you tried to open a bank account with an email address and name you'd be sent on your way, but with Paypal you can. This makes fraud a huge issue for them, so it's entirely reasonable for them to be locking accounts when something vaguely suspicious happens. Paypal shouldn't be treated like a bank (even if they're registered as one here in Europe) because they're not.

If they get even a whiff of fraud or a scam then they're sure as hell going to investigate, because if it goes wrong and it is fraud who has to pick up the bill? Paypal.

Does Paypal give the money back to the donors after a certain amount of time has passed or do they continue to keep other people's money?

I have none. The colour of my flag does not make me guilty of fraud.

It's like pulling a fake gun near a cop. You can't be honest without looking honest.

Given how many legitimate people collect donations through paypal, I would say it's more like pulling a fake gun near a cop in a fake gun store.

How do fake charities impact them, exactly? Are they losing out on tax per transaction, or what?

(What is a "fake" charity, anyway? I've worked with some charitable companies that were outright scams, but due to clever phrasing, continue to do business.)

How do fake charities impact them, exactly? Are they losing out on tax per transaction, or what?

I expect that when such organizations are uncovered, paypal gets a flood of credit card chargebacks (but can't recover the money from the "charity" because by that point the scammers have drained the accounts and moved on).

What is a "fake" charity, anyway?

The canonical example is "disaster relief" organizations which pop up after each major earthquake but just pocket the cash rather than assisting disaster victims.

Red flag? Hmmm, don't think so...

https://www.paypal.com/us/cgi-bin/?&cmd=_donate-intro-ou...

"To accept donations, put a Donate button on your website. Creating the button is easy. We provide the HTML code, which you simply copy and paste to your site. Donors can then click the button to make donations. See button features you can customize."

How could you use the Donate button? "Let’s say that you are an animal rescue organization needing to raise funds to provide care for animals. You can easily add a donate button to your website and make it safe and convenient for supporters to give to your cause"

cperciva, there are actually two common scams involving charities and paypal. The first is the risk of people donating to fake charities as you mentioned. The second is the risk of criminals using stolen credit cards to make donations to charities; in other words, testing to see if the stolen credit card information is usable. The headaches caused to charities are very painful, prolonged and costly (charge backs).

There are other similar and/or related scams involving "charities" (both legitimate and fake) but I feel this is the wrong place to discuss them.

The trouble the OP has with "donations" to an open source project tend to be very common with paypal and they often result in a false-positive in the paypal "fraud detection" (risk management) analysis. I know of one example where a prominent OpenBSD developer needed some fast hardware. He does full builds of the entire "ports" tree (i.e. all software ported to OpenBSD), so buying powerful (read: expenseive) hardware was really needed. One person stepped up with a donation/gift of the needed funds, and sent the payment through paypal...

The first thing that happened is the donor got a call from paypal because the donation triggered a false-positive in their "fraud detection" analysis. It might seem like an annoyance, but this is actually a good thing.

The next thing that happened is, the donor got a call from the credit card department of his bank, mainly because he used only a credit card with paypal. Yep, there was another false-positive alert on the fraud detection system of his bank.

During these two false-positives, the paypaly account of the open source developer receiving the funds was locked. In this case, the mistaken lock was resolved very quickly due to the two separate phone calls, but it was still a pain in the ass.

There is hope. The way to get around the paypal "requirement" of an open source project needing to be a vetted and registered 501(3)(c) organization in the US (or equivalent in other countries) is to have the payments classified as a "gift" rather than a "donation" in paypal parlance.

Paypal services have horror stories like this all over the web and have become a largely four-letter word in payment processing.

Always consider any balance hosted at Paypal "in danger" and at risk of loss. Sweep into your account.

You don't need a lawyer to take this to your local small claims since its under a typical award.

Sweep it into your account, then sweep that into another account lest they decide to withdraw it.

Have you tried moneybookers? is it safer? I have had troubles also with paypal and my frind`s accounts has been frozen too. However most of our clients/donators don`t even know there are other ways of sending money.

We use the paypal donate function for a registered 501(c)3 and haven't had any real problems but I must say the majority of donations (in quantity, and higher amounts) still come in through checks in the mail.

Frozen accounts can only stay frozen for so long. Worst case, after 90 days they'll deactivate the account and send you a check.

Have you tried moneybookers?