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Comment by pydanny | Hacker News Reader

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.

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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.

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.

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.

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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