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PayPal Withholding Indie Game Dev's €600,000 Account 775

Posted by Soulskill
from the money-for-nothin' dept.
epee1221 writes "Markus Persson, a.k.a. Notch, the developer of Minecraft, posted on his development blog today that PayPal limited his account with unspecified cause on August 25th. Since then, payments for the alpha version of Minecraft have continued accumulating while Notch has been unable to withdraw them, and the account now contains over €600,000. PayPal recently told him it may take up to two more weeks for things to get sorted out and that if they conclude that there is funny business involved, they will keep the money." This unfortunate news followed an announcement a few days ago that he and a friend would be starting a studio of their own to continue development on Minecraft and start working on a new project.
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PayPal Withholding Indie Game Dev's €600,000 Account

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  • by Anonymous Coward on Friday September 10, 2010 @01:40PM (#33536024)

    when it's paypal

    Those guys are a law unto themselves, and their dispute resolution system adds new meaning to the word opaque.

    I've had money removed from my account several years back (about £80) and spent 3 months on the phone trying to get it back, granted 2 of those months were talking to my bank (natwest) after being stonewalled by paypal, natwest decided at the end of 3 months to tell me they had no record of me ever making a complaint and that I would need to go to the police.

    I swore off ever using paypal again But here I am, 3 years or so later with a paypal account I use regularly. Not having one is just far too much of a hindrance when it comes to things like using ebay, and paying for minecraft.

    • by mark99 (459508) on Friday September 10, 2010 @01:49PM (#33536176) Journal

      They blocked my account for reasons that were not clear to me, but had to do with being an American living in Germany using a German bank. There was a way to get it unblocked, but it was complicated and not worth my time. I only ever used it for eBay, so I just stopped using eBay.
      They are just stupid.

      • Seriously, do they doubt the veracity of the horror tales?!

        • by six11 (579) <johnsogg@@@cmu...edu> on Friday September 10, 2010 @02:52PM (#33537160) Homepage

          I was popping in to ask the same question... who uses paypal? I've found it completely unnecessary, hard to use, and has an unreasonably large potential for fraud/theft. Sometimes I buy something online and I have no choice but to intersect with some form of PayPal money laundering. Invariably I decide I don't need that thing so badly and buy elsewhere.

        • by Trepidity (597) <delirium-slashdot@@@hackish...org> on Friday September 10, 2010 @03:28PM (#33537690)

          Mostly because of either no choice or few alternatives.

          For payment-only, you often have no choice, because it's what eBay and/or a particular merchant accepts. On the other hand, for payment-only it's also relatively unproblematic, because you shouldn't have large amounts of money sitting in the account that PayPal could freeze.

          For accepting money, you're much more exposed to PayPal's whims, and you also have a choice of what payment processor you use. However, you don't often have many good choices. Two of its competitors are Google Checkout and Amazon's payment service, but they're much less international. PayPal supports dozens of currencies and merchants in >100 countries, while Google Checkout is limited to only merchants in the U.S. and U.K., and Amazon's payments services only allow withdrawal of funds to U.S. bank accounts (and only do transactions in U.S. dollars). Since the Minecraft developer is Swedish, neither of those are options.

          Another alternative is to set up a merchant account for processing credit-card payments yourself, but you need to be a certain size for that to be a sensible option. The Minecraft guy probably is big enough now that a merchant account makes sense, but he wasn't when he started out as a random 1-man shop selling a $10 game on the internet.

          Basically there is a big gap in the market for lightweight payment-acceptance services available to non-American merchants. If you're in Sweden, you have PayPal, a merchant account, accepting bank transfers directly, and mailed payments.

          • by cduffy (652) <charles+slashdot@dyfis.net> on Friday September 10, 2010 @03:49PM (#33538008)

            Another alternative is to set up a merchant account for processing credit-card payments yourself, but you need to be a certain size for that to be a sensible option. The Minecraft guy probably is big enough now that a merchant account makes sense, but he wasn't when he started out as a random 1-man shop selling a $10 game on the internet.

            I'm going to use this as an opportunity to plug BrainTree -- my new employer uses them as our payment gateway, and they're a dream to work with: They provide well-written APIs for all common platforms, and when I have a problem I get an email back from a member of their dev team typically in about 30 minutes.

            Their front page says "We [heart] developers", and AFAICT they mean it. Github is one of their marquee customers.

            Taking credit cards doesn't need to be awful.

    • by TamCaP (900777) on Friday September 10, 2010 @01:53PM (#33536232)
      PayPal power results from 2 factors. Terrible bank bank transfer opportunities for individuals domestically, and even more expensive ones internationally. In many European countries nobody uses Paypal for transactions. It's either direct bank transfer (many banks offer no-fee transfers to other banks), bank-based payment system or credit cards. Yet in the US (a HUGE consumer market) those options are limited to credit cards, and check / ACH system and PayPal fills that niche just perfectly. It's changing, i.e. SunTrust recently introduced cheap on-line wire-transfers for only $3 / transfer - a big upgrade, as it used to be $25. Yet for some reason, the interbanking system in the US is still far behind what Europe has to offer (except for credit cards - there are definitely more developed here!)
      • by Have Brain Will Rent (1031664) on Friday September 10, 2010 @02:15PM (#33536584)
        Yes. In Canada you can do an Interac email money transfer from most banks for about $1. If the receiver is with one of the major banks they can have the money in their account within minutes of receiving the email from the sender and if they are with one of the institutions not participating in the scheme then they can use a middleman-service and still get the money within IIRC 3 days. There is also HyperWallet which seems favoured by the credit unions and a few of the banks and they provide a similar service... in fact the fastest way to get money into your PayPal account from a Canadian bank is to use HyperWallet.

        I used to use Western Union wire transfers but they have become insanely expensive IMHO.
    • by 0100010001010011 (652467) on Friday September 10, 2010 @01:56PM (#33536278)

      I'm on my 10th-ish PayPal account. I NEVER accept money through it. I send a GoogleCheckout invoice. Even for eBay.

      But on Car forums, certain websites, etc, it seems all they accept is PayPal. So I'll use it with a temporary credit card until they figure out I'm the same person as my other locked accounts and lock another one.

      It all started when I sold something on eBay. Turns out it was with a stolen credit card. So they reversed the payment leaving me with a -$600 balance. Which they said was my fault somehow. Then the second account I sold a laptop and has $400 sitting in it 'locked up' until I pay them the $600 in the first account.

      I'm not a violent man, but I could honestly go vigilante on some middle managers at PayPal with a crow bar.

      • Re: (Score:3, Informative)

        by amorsen (7485)

        Turns out it was with a stolen credit card. So they reversed the payment leaving me with a -$600 balance.

        I'm not saying that it's right, but the real banks do exactly the same thing. As a merchant, all the risk is yours. The agreements you have to sign with banks (or other credit card transaction handlers) are truly horrendous, but you can't take your business elsewhere, because they're all pretty much the same.

        • by commodore64_love (1445365) on Friday September 10, 2010 @02:30PM (#33536868) Journal

          If the credit card was stolen, then the loss should come out of the credit company's pocket, not Paypal or the Ebay seller. PLUS paypal is supposed to provide seller protection if the item was shipped to a verified address.

          If it were me I'd track down the buyer and demand back whatever product he stole. You have the address.

          ALSO: Those comments that say Paypal is not regulated are flat wrong. There are numerous regulations/laws that cover Paypal, and it was their violations of those laws that got them into trouble with multiple American States several years ago. The judge in the case nullified huge sections of Paypal's EULA as being contrary to these laws. ("Consumers cannot sign-away their rights already protected by state and/or federal law.")
          .

          • by node 3 (115640) on Friday September 10, 2010 @03:03PM (#33537292)

            ALSO: Those comments that say Paypal is not regulated are flat wrong. ALSO: Those comments that say Paypal is not regulated are flat wrong.

            *NOBODY* is saying that PayPal is not subject to laws. What they are saying is they aren't regulated like a bank, where you can have some reasonable level of confidence that your money is safe.

          • Re: (Score:3, Insightful)

            by hey! (33014)

            If the credit card was stolen, then the loss should come out of the credit company's pocket, not Paypal or the Ebay seller.

            Why?

            Being pretty far to the left politically, I'm just about the least likely person I know to have sympathy for a bank, but I just don't see why the bank is responsible here.

            The law in the US limits the liability of the cardholder, who may well be the one most at fault. So it is the merchant who bears the cost. When the fraudster uses a stolen credit card, he is stealing from the merchant, not the cardholder. What the GP is asking is for somebody else to compensate him for having been robbed of $600. I

            • Re: (Score:3, Interesting)

              Why? Because it's the credit card company's fault for making an insecure system. They should be held liable, and maybe that would encourage them to develop more secure systems that can't be swiped so easily. Example: A few years ago I had the digits stolen off my Discover card, probably by the man at the hotel where I stayed. Either he or someone else racked-up $3500 using a fake card at Walmart. Obviously it's not my fault, but neither is it Walmart's fault.

              I guess you think Walmart should be the one

    • The Vogons go into a rage of poetry writing when thinking about Paypal Bureaucracy.

    • by Anonymous Coward on Friday September 10, 2010 @02:36PM (#33536952)
      If PayPal stole close to $1,000,000.00 US from me and I couldn't get it back through legal methods, I'd burn their fucking building to the ground with them in it. That's more money than a lot of people see in their entire lifetime.
    • by Surt (22457) on Friday September 10, 2010 @03:09PM (#33537380) Homepage Journal

      Hah. I suggested paypal had serious problems in another thread and got jumped on by some paypal engineer. Bet he's enjoying this thread!

      • by Kalriath (849904) on Saturday September 11, 2010 @05:09AM (#33543344)

        Ah yes, Enderandrew. I said I had problems with Paypal refusing to offer dispute resolution on one of my sales (via a third party) and he insisted that Paypal is flawless, and it was my processor's fault. Also insisted that any problems can easily be sorted by calling Paypal's "giant customer service centre".

        Suck it, Enderandrew.

  • This is why... (Score:4, Insightful)

    by MrEricSir (398214) on Friday September 10, 2010 @01:41PM (#33536032) Homepage

    ...it's best to avoid PayPal. Shady business practices, horrible support, and it's regulated even less than an American bank.

  • competition? (Score:3, Insightful)

    by Anonymous Coward on Friday September 10, 2010 @01:42PM (#33536048)

    PayPal are goons and apparently have a long history of such shenanigans. Why no other more reputable service has challenged them in the e-payment space is beyond me.

    • Re: (Score:3, Informative)

      by MikeBabcock (65886)

      In Canada we have Interac [interac.ca]. Many don't realize it, but every bank card in the country can be used to do online person-to-person money transfers without using Paypal.

  • Return the money (Score:5, Insightful)

    by He who knows (1376995) on Friday September 10, 2010 @01:43PM (#33536070)
    If paypal decides that there has been some "funny buisness" involved shouldnt they return the money to the origional accounts.
    • Re: (Score:3, Funny)

      Obviously they'll decide that the funny business is indeed happening. From Paypal's side. And they'll keep the money.

  • This is why (Score:4, Insightful)

    by geekoid (135745) <dadinportland@yBLUEahoo.com minus berry> on Friday September 10, 2010 @01:44PM (#33536092) Homepage Journal

    companies that handle payment transaction needs regulation. At the very least, the people who sent money via paypal would be reimbursement.

  • Thank you Slashdot (Score:4, Insightful)

    by locallyunscene (1000523) on Friday September 10, 2010 @01:45PM (#33536106)
    Every time I start thinking about creating a PayPal account because it would be nice to give money to some of the web places that I frequent, but only accept PayPal some story comes along about how willing they are to screw you over. Hopefully this publicity forces them to do the right thing here soon.
  • by mewsenews (251487) on Friday September 10, 2010 @01:45PM (#33536114) Homepage

    Almost exactly five years ago, Paypal froze $30k in Hurricane Katrina charity money raised by SomethingAwful, the story is here [somethingawful.com]. They're still crooks now.

  • The CEOs were bouncing around in their piles of money so exuberantly that one got sick in his. The amount of money in your account fits our CEO frolicking needs perfectly. Thank you for the interest free loan, and don't ask about the funny smell on your money when you do receive it.

  • Two Words (Score:4, Informative)

    by killmenow (184444) on Friday September 10, 2010 @01:46PM (#33536130)
    Google Checkout
    • Re:Two Words (Score:4, Interesting)

      by gandhi_2 (1108023) on Friday September 10, 2010 @01:53PM (#33536230) Homepage

      To be fair, if you generally have problems with anything Google, you'll be lucky to ever make contact with a human to fix it.

      • Re:Two Words (Score:5, Informative)

        by Cederic (9623) on Friday September 10, 2010 @02:22PM (#33536722) Journal

        and yet, the one time I had an issue with an online merchant I'd bought from via Google Checkout, filling in Google's "it went wrong" form led to an immediate response from Google, and a couple of days later a refund in full.

        When the process works seamlessly without me needing direct contact with a person, I'm willing to forgo that contact.

    • Re:Two Words (Score:5, Informative)

      by gaspyy (514539) on Friday September 10, 2010 @02:07PM (#33536460)

      A few more words about Google Checkout: works only in US.

      I am using Paypal to sell a game. The demographics are USA 39%, UK 11%, Italy 8% and so on. Overall the 20-80 rule is observed.
      By using Google Checkout instead of PayPal, I would have prevented 61% of my sales - you know, long tail and all. It's true that only 0.05% of the sales are from e.g. Maldives, but all these sales add up.

      If Google Checkout gets global, I'll be the first to jump. Until then, Paypal is a simple method trusted by the buyers. I just make sure I don't keep my money there.

    • Re: (Score:3, Interesting)

      IF you are in the UK and US but forget Canada. I tried signing a few months back and there nowhere did it say as a Canadian I couldn't use checkout until I filled out my info, including my cell number and after submission I got a nice notice of I can't use it because I'm in Canada. So these fucks just got my personal business info and then one they got it they tell me I can't use the service.
  • by rotide (1015173) on Friday September 10, 2010 @01:50PM (#33536186)

    PayPal is infamous for this.

    Years ago, when I pulled my account information from them it was "common" knowledge in the eBay scene that if you were a seller and a buyer claimed it was a fraudulent sale, PayPal would pull the refund directly from your PayPal account without notice. If the funds were not in your PayPal account, they would pull it from your linked checking account, again, without notice.

    The common strategy was to setup a second "dummy" checking account and link PayPal to that one. Whenever you had money in your PayPal account above a certain amount, pull it into your "dummy" account and then transfer the full balance _out_ of that account into one that isn't linked to PayPal.

    Why someone would trust PayPal, who isn't a bank, with well over half a million dollars is beyond me.

    For some interesting stories, paypalsucks.com

    • Re: (Score:3, Informative)

      by lwsimon (724555)
      I do this, to this day, for my eBay store. *Everyone* I know who uses PayPal for business has been burned to one degree or another.
    • Re: (Score:3, Insightful)

      by TooMuchToDo (882796)

      THIS. THIS. THIS. I own a fairly decent sized hosting business (several million dollars a year in revenue). We take Paypal as a payment option, but despise them. We have a seperate business checking account solely tied to our Paypal account, and we sweep our paypal balance into our checking account every 1-2 days (and have our bank set to move any money in the paypal checking account to our operating account not tied to paypal). Never. trust. Paypal.

    • by MozeeToby (1163751) on Friday September 10, 2010 @02:29PM (#33536846)

      Why someone would trust PayPal, who isn't a bank, with well over half a million dollars is beyond me.

      I don't think they did, the summary makes it sound like they kept the balance low but have been locked out of their account for whatever reason and since they were locked out 600,000 Euros (actually more than 3/4 of a million dollars!) has come into the account. They've had no way to remove it, no way to prevent the money coming in short of shutting down their operation, and no way outside of PayPal's customer service to resolve the situation. Honestly, it's almost criminal (or maybe even is criminal, I don't know).

      • Re: (Score:3, Insightful)

        by Nadaka (224565)

        Exactly, how can they "lock" an account and still allow incoming deposits? It is ridiculously stupid behavior at best.

  • by pastafazou (648001) on Friday September 10, 2010 @01:53PM (#33536228)
    ....how the hell the guy made €600,000 from Minecraft?
    • by AndrewNeo (979708) on Friday September 10, 2010 @02:15PM (#33536582) Homepage

      Well, first you put something out there people want to play, then people like me pay 10EUR for it, and ...

    • Re: (Score:3, Insightful)

      by robmv (855035)

      probably he found a big gold vein while mining

    • by Beelzebud (1361137) on Friday September 10, 2010 @02:19PM (#33536670)
      I know, right? I thought ALL PC gamers just pirated games!
    • Re: (Score:3, Funny)

      by Angst Badger (8636)

      Or why, with 600,000 in revenue, he's even using PayPal at all instead of just getting a merchant account with a real bank? Hell, *I* did that with a project that ended up making a whopping $750.

  • by Qubit (100461) on Friday September 10, 2010 @01:55PM (#33536262) Homepage Journal

    Why does electronic fund transfer have to be so complicated?

    With my bank I can hop online and pay anyone in the world any amount of money. Well, they seem to limit it to how much I currently have in my account, and if the person I wish to pay does not have a real address (No "221B Baker Street + 2i" allowed), I'll have to hand deliver it instead of getting them to post it for free, but there's little limitation there.

    Oh, and did I mention that the whole thing doesn't cost me a cent?

    Heck, the only thing it's missing is a few features like:
    - The ability to transfer money anonymously (all the recipient would get would be a confirmation crypto hash or something, maybe something that I could reveal later in a court, but that they couldn't* pin on me)
    - The ability to make a storefront so all of the fund transfer went through "Qubit's Quantum Quickymart"
    - Better account management, and a way to group or tag business and bills vs. friends vs. impulse game purchases (The way GMail handles email is a good first shot at a UI)

    The bank isn't making money when I transfer funds, but they don't care -- they're already making money on the stuff I have sitting in their coffers.

    So why are we stuck with PayPal, which is pretty much a
    - Shady
    - Costly
    - Annoying
    - Duplicate service

    ??

    Hopefully some bank (or series of banks) will make this happen for us. Moving money around shouldn't be anywhere near this complicated!

    * Says the power of NP.

    • Re: (Score:3, Informative)

      by JumpDrive (1437895)
      The only problem I can see is why would a bank go through this hassle.
      Currently they can just hold onto your money and put it into the Federal Reserve and make money.
      Why go through all the hassle of dealing with buyers and sellers.
      It's much more lucrative to them if the sale goes through a credit account also.
  • by derrickh (157646) on Friday September 10, 2010 @01:56PM (#33536268) Homepage

    When it comes to smaller amounts(under 5k), it's a toss up on using Google Checkout or Paypal. But anything over that, and you're just asking for trouble. These guys were way past to point of needing a real credit card processor. With that kind of money, it makes a lot more sense to just get a merchant account. Look at Paypal like a piggy bank. It's fine for loose change, but you wouldn't stick your retirement money in there.

     

  • by A Friendly Troll (1017492) on Friday September 10, 2010 @01:56PM (#33536274)

    I go to the game's homepage, and I see a video about rollercoasters, and not gameplay.

    I browse around the site, nothing. The only, ONLY description of the game is, I quote, "Minecraft is a game about placing blocks while running from skeletons. Or something like that..", followed by the rollercoaster video, and then "The game is a lot like that, but also has enemies and cave exploring and mining and farming and flowing water and dynamic lighting and a huge (huge) randomly generated world map."

    Yeah, thanks. I've never heard of Minecraft before, and I'd guess that few people have. So what is it - a rollercoaster game with zombies and farming?!

    Anyway...

    The pre-purchase page says "If you pre-purchase now during alpha, you pay just 9.95!"

    If we round it to 10 EUR, 600k is sixty thousand people paying for something that is basically entirely unknown and isn't even described on the website.

    And PayPal freezes the money? Gee, what a surprise.

    • by Lord Ender (156273) on Friday September 10, 2010 @02:16PM (#33536610) Homepage

      Actually, sixty thousand people have paid for it just since the account was frozen!

      Minecraft is an entirely new category of game. There is no name for this new category. This is why indie development rocks; EA is happy to release new iterations of the FPS, but they would never gamble with a new class of game entirely.

      The basic idea of Minecraft is this: you find yourself in a randomly-generated 3D world. It's daytime. At night, monsters will pop out of the darkness and attack you. Your only hope of survival is to harvest resources from the world (wood, stone, etc.) and build a shelter and weapons to defend yourself. The night/day cycle repeats: harvest, build, defend.

      Think of it as something of a combo of Elder Scrolls and Second Life.

    • by rekenner (849871) on Friday September 10, 2010 @02:20PM (#33536680) Homepage
      Here, let me type 9 characters into YouTube for you.
      http://www.youtube.com/results?search_query=Minecraft&page=&utm_source=opensearch [youtube.com]
      Bam! Watch. Be educated. Or shit, look at Wikipedia. It can explain it too. It's amazingly popular among other Internet forums (Something Awful, LueLinks, part of 4chan), as even though it's an alpha, it's been fully playable for months. So, you know. Multiplayer games that let you goof off and hang out with people make money. SHOCK.
      I'm not sure if you're lazy, stupid, or a troll. But your post is calling the guy out on tricking people, when there's an easy to find product there. ... Though, looking at your name, I suppose I have the answer.
  • by Kristopeit, M. D. (1892582) on Friday September 10, 2010 @01:59PM (#33536330)
    back in 1997 i ran a similar internet video game... edrugtrader.com... it's still running, but i no longer accept payments to play. paypal froze my account and seized all of the money from the then 100,000+ users. the game is based on drug dealing, and they claimed i was breaking the law because drug dealing is illegal... however there was no actual drug dealing... it's just a market simulation game.

    paypal is evil... don't do business with them.

  • by Big Smirk (692056) on Friday September 10, 2010 @02:52PM (#33537152)

    If you buy through Paypal and receive the product via a download, there is no guarantee that the product got into the hands of the legal owner of the credit card.

    So with stolen credit cards or Paypal accounts, some people must have been downloading the game (or however its registered). When the rightful owners found out, they had the charges reversed. Leaving Paypal to prove that the money wasn't indeed stolen.

    Paypal offers protection only if you send to 'verified address'. If you send the product to some random address, then you are taking a risk. Likewise with activation codes.

    If Bob.Smith@hotmail.com trys to buy something from you using a Paypal account assigned to Nancy.Smith@google.com, your an idiot if you send the activation code to Bob.Smith@hotmail.com. Activation code should only be sent to Nancy.Smith.

    Bottom line, if he has 600,000 in the account, you can bet Paypal was just hit up by a credit card company to return some of that money. Paypal is just trying to figure out exactly what has to be returned. If its a lot of accounts, Paypal might freeze the account just to see how much money needs to be returned. Eventually, when whatever statute of limitations runs out, he will get the balance (Paypal of course gets the interest over those many months).

    I've had 0 problems with Paypal. I only ship to verified addresses.

  • by Yvan256 (722131) on Friday September 10, 2010 @02:57PM (#33537214) Homepage Journal

    Before you say "stop using PayPal and start using something else", what else are we supposed to use?

    Google Checkout, for example, is only available in the USA and the UK.

    Another thing about PayPal is that it's extremely simple to add to a website. All you need is a few lines of HTML and you have a shopping cart and payment system.

  • by Khyber (864651) <techkitsune@gmail.com> on Friday September 10, 2010 @03:10PM (#33537418) Homepage Journal

    Were it not for her putting PayPal as the main eBay payment processor, this shit would have never happened as PayPal would be DEAD.

    Those of you living in California, DO NOT VOTE MEG WHITMAN IF YOU HAVE HALF A BRAIN.

  • by topham (32406) on Friday September 10, 2010 @04:34PM (#33538584) Homepage

    Selling an unfinished product, and having substantially amount of success at it will trigger PayPals fraud department.

    Sad, but true...

It is much easier to suggest solutions when you know nothing about the problem.

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