Comment by InclinedPlane | Hacker News Reader

Comment by InclinedPlane | Hacker News Reader

Wow, I find it amazing that there is so much augery going on in this post. Ooo, maybe paypal hates python conferences! Maybe they just hate open source conferences!

And then they go on to describe how they refuse to kowtow to the obviously made up "needs of paypal's anti-fraud division".

There are lots of reasons to get mad at paypal but all too often the formula "We understood nothing about business, didn't even bother to familiarize ourselves with the law or financial regulations, and somehow problems resulted! We blame paypal!" is repeated all too often.

Let's look at this from the flip side. You decide you want to defraud a bunch of people, so you gin up a fake conference, it's easy to put up a fancy web page and sucker people in, then you take the money and run. You think this doesn't happen?

Paypal does have pretty crappy customer service, but if you expect to accrue a significant fraction of a million dollars in a paypal account and you don't think that somehow there might be some hoops to jump through then you are living in a fantasy world.

There's a reason why there is a lot of markup in event ticketing agencies (such as brown paper tickets, or event brite, or the hated ticket master), and it's not because it's such a fundamentally easy problem.

Edit: I'll say this again. It sucks when people who are working based on perfectly good intentions get hurt by the system but we live in a heavily regulated era. Expecting that you can operate a business without taking heed of the relevant regulations and business rules is massively naive. More so, it's a disservice to your customers. Imagine that you were running a 100% cash business. It would certainly make some parts easier, but don't you think people would start asking questions?

Agreed. I organized a startup conference (http://thestartupconference.com) for 3 years in 4 cities, always with PayPal as payment. Some advice: make sure you are incorporated. Definitely don't use a personal account to receive payments. Assume that most of the money may be stuck for a while, but know that you'll get your payments eventually, so arrange for backup financing.

Bottom line: if you do this as an amateur, expect to be treated like one. You can't script banking like you'd script ssh.

> know that you'll get your payments eventually, so arrange for backup financing.

How easy would you say it would be to get a loan with "I have $N-thousand dollars stuck in my Paypal account, expected to clear" as collateral?

...actually, wait, that sounds like a [banking] startup idea:

> "We accept payments for an event into an escrow pool, then lend you (with interest) a percentage of the escrow-pool as an advance to set up the event, then release the escrow-pool to you automatically if-and-only-if there aren't too many complaints after the event [otherwise the issue goes to a set-length arbitration, and then we either release the money to you, or refund it in its entirety.] For trusted repeat event-creators, we may increase the loan percentage up to 100%, and may delay loan-interest accrual until after the event-date. We're also partnered with an event underwriter who you can allow us to ensure your event with automatically, in case of black-swan event failure."

Is anyone doing this? Is it even feasible?

This sounds like a cashflow loan, which FastPay does http://gofastpay.com/.

I think it can also be described as factoring http://en.wikipedia.org/wiki/Factoring_(finance). And lots of companies are involved in this space, though there is still room for improvement.

How hard is it for PayPal to pay 10 people as community managers or developer evangelists to take care of this issue? Heck, smaller companies like Heroku do it with about 8 people and cover the globe.

Answer: They've already done it. They have the staff in place.

The problem is their community managers and developer evangelists are sticking to PayPal specific conferences. They aren't in touch with people like me and dare I say you, i.e. the little guy.

It's not a conference issue:

https://www.paypal-businesscenter.com/content/presale-policy...

It's trivial for the community managers and developer evangelists of PayPal to check on conferences. And it's trivial for anti-fraud people at PayPal check on conferences vetted by the community managers and developer evangelists.

If PayPal wants to continue angering the community and world with this blanket policy, that's their problem. We'll all move on to other payment systems as they emerge.

This isn't about just ensuring that a conference is legitimate or not, it's a fundamental problem with presale events. You'll have the same issue if you have an ordinary merchant account as well, presales are a huge liability concern, especially for events, legitimate or no.

If you find yourself in circumstances where you require presale revenue in order to hold an event then I'd suggest using a crowdfunding platform like kicktarter or indiegogo or the specifically event oriented event tilt and picatic.

The problem is that you haven't identified PayPal's concern. It's not sussing out whether a conference is real or fake. All of the money is at risk even in a real conference, run by a trustworthy person. You want their evangelists to reach out to conference organizers. If they were intimately involved in every single developer conference worldwide, it still would not eliminate PayPal's risk. It wouldn't solve the problem.

The risk is that one single person holds a huge pile of funds for services that are supposed to be rendered in the future. That single person can skip out of town at any time. They could get hit by a bus. Their venue could burn down in a fire. Whatever the cause, there is a non-zero risk that the funds aren't used as intended or the event doesn't happen, and PayPal will be on the hook for hundreds or thousands of disputes and chargebacks from the purchasers.

This is why payment services for events like EventBrite don't work like PayPal. EB gets paid the money, and the event organizer has no access to it until after the event, when there's no chance of EB being on the hook for disputes for an event that didn't happen.

PayPal isn't in the insurance business. When it does allow a pre-sale, per the terms already linked in this discussion, they typically require a reserve. That means money can come into your account but you can't withdraw it. That's not malicious, that's the same thing EventBrite does. You only get the money after you've rendered the service it was paid for; it's protection for the attendees and PayPal. To expect anything different is to expect PayPal to act as a free insurer of events.

It's worse than that. What happens when the event organizer, operating 100% in good faith, buys equipment, pays for airfare and lodging for special guests and event staff, pays deposits for the space, etc. and then due to events outside of their control the event has to be cancelled (perhaps due to a hurricane or maybe the bass player in the band decides to go into rehab and the concert gets cancelled, which happened to me once and they refunded me all but $5 of the ticket price back)? Now the event organizer doesn't have enough money to pay everyone back. This is part of the reason why "service charges" and "convenience fees" are so high when you buy tickets in advance, because it can rapidly turn into a giant cluster fuck.

That sounds like a reason to run every event as an individually-incorporated LLC, and then, in such a situation, let it go bankrupt.

In my state (Indiana) they are not even licensed. Other places where they do adhere to the law, they are a money transmitter. In Indiana, that only allows money holding up to 10 days, unless law enforcement files paperwork with a judge.

So yeah. I will use them. But if I have any problems with them, I'll take them to small claims over non-compliance with the law.

Saying it is trivial shows how little you have thought about the issues involved. Anything checks that are trivial mean it is easy to be scammed.

Heroku does it with 7-8, maybe ten people for all events around the world. So do other companies like 10gen. Why not PayPal's developer community staff? What's their problem?

I'm absolutely shocked by your level of naivety. Why do you imagine that Heroku and Paypal are even remotely comparable companies? Do you have any conception of the total volume of transactions that paypal processes? It's millions of transactions and hundreds of millions of dollars per day. That's about 3 to 4 orders of magnitude larger than heroku's business.

I guess I'm naive then to assume PayPal is being hurt by Stripe and bad press.

We'll see PayPal is doing in 5 years. ;-)

Competition is great, and paypal has tons of room for improvement, that's for sure. But I doubt you'll see dramatic differences in the official policy of any major processor with regards to pre-orders. That's a matter of Visa/MC policy, actually. And the reason why paypal adheres so strictly to it is because if you violate Visa/MC policy then it's open season for chargebacks. One reason some of paypal's competitors look better is because they are at a much smaller scale and so don't have to concern themselves as much with the issues paypal is forced to take very seriously. But there's no way that wouldn't change if those processors started seeing transaction volumes on paypal's scale.

Best case scenario is that competition results either in a new top dog with better customer service or drives paypal to improve. But there's no way you're going to have a situation where tens of thousands of dollars suddenly flowing through an account won't result in lots of roadblocks and red tape. Not unless everyone moves to some sort of greymarket system like bitcoin.

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