PayPal Withholding Indie Game Dev's €600,000 Account 775
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.
When is a bank not a bank (Score:5, Insightful)
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.
This is why... (Score:4, Insightful)
...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)
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.
Return the money (Score:5, Insightful)
Don't use Paypal! (Score:1, Insightful)
It is simple, do not use Paypal.
This is why (Score:4, Insightful)
companies that handle payment transaction needs regulation. At the very least, the people who sent money via paypal would be reimbursement.
Re:competition? (Score:2, Insightful)
As I recall, Google has tried.
However, eBay has made it so all payments there are required to go through PayPal. Which would seem to me to be a major misuse of monopoly powers...
Thank you Slashdot (Score:4, Insightful)
Maybe we have our answer? (Score:3, Insightful)
Okay, so yeah. That seems like a LOT of money to be traveling through the accounts of an alpha indie game. Maybe Paypal had real reasons to suspect something fishy was going on.
Has anyone asked.... (Score:5, Insightful)
Explain it to me.... (Score:5, Insightful)
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.
At 600k, it's time to move up (Score:4, Insightful)
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.
Re:have not used paypal in 3 or 4 years (Score:3, Insightful)
anyone doing any kind of business that generates real money should get setup with credit card processing or some type of real bank. On top of randomly screwing people, paypal also nickle and dime people to death. Never will use paypal again.
Absolutely true. I run a conference where we allow registrations by credit card (actually, we strongly encourage registration by CC, because all other forms of payment except cash are a massive pain). We looked long and hard at different options and while PayPal's merchant processing was one possibility, we went with a standard merchant account through FirstData / Citibank. Never been happier. Excellent service. Clear-as-a-bell charges, although somewhat intricate, and good code support for those who either want to roll their own payment, or integrate with standard shopping carts. The cost was less than PayPal, and the terms better. And that was for our event that processes under USD 50,000 per year.
Why, at the commercial level, anyone would use PayPal, even their so-called professional level service, is beyond me.
Re:Maybe we have our answer? (Score:5, Insightful)
So being successful is now funny business?
That's utter bullshit. And they should know by now that it is not funny business, it's a popular game developed by one or two people. It can happen you know.
Re:have not used paypal in 3 or 4 years (Score:2, Insightful)
Same situation here - running a conference, needed to allow registrations by credit card. Our primary method of payment is Google Checkout. Main difference: A large percentage of our attendees insisted we support PayPal - so we have a PayPal account that we keep at a zero-dollar balance. When people send us money via PayPal, we immediately transfer it out of that account and to our bank. All of our actual money is held at our real, stable, brick-and-mortar bank.
For fear of precisely this reason. If I had enough support in our fanbase, I'd drop PayPal like a dead cat.
Re:competition? (Score:2, Insightful)
Why no other more reputable service has challenged them in the e-payment space is beyond me.
Both Amazon Payments and Google Checkout are competing with PayPal, but PayPal has a considerable lead to overcome.
Re:What the hell *is* Minecraft? (Score:1, Insightful)
I personally know 20+ people that have bought it in the last week. Now, I know I'm not a significant data point -- but neither are you, and the fact that you haven't heard of it has no bearing on its popularity. If you had heard of it, you'd know that it's not "in alpha," but rather "Alpha" is the name of the new version of the game, which has been around for over a year in other forms.
Fortunately, we have objective measurements that support me more than you: http://www.google.com/trends?q=minecraft&ctab=0&geo=all&date=2010&sort=0
Re:Maybe we have our answer? (Score:3, Insightful)
Straw man. I never said it was because he was successful, but picture this: a small indie game making a few hundred bucks a week suddenly gets a 600,000 euro deposit. What does that look like to you? Paypal has a legal duty to prevent money laundering.
Re:Maybe we have our answer? (Score:3, Insightful)
Okay, so yeah. That seems like a LOT of money to be traveling through the accounts of an alpha indie game. Maybe Paypal had real reasons to suspect something fishy was going on.
It's none of their darned business to unilaterally claim something fishy is going on unless there is a complainant. It doesn't sound as if there is one in this case so they should keep their paws off until there is a cause to freeze the account.
Re:Paypal are notorious for this (Score:1, Insightful)
Re:When is a bank not a bank (Score:2, Insightful)
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.
That was their problem. PayPal was the one taking the credit card and acting as the (very well compensated) intermediary between buyer and seller. PayPal does the actual processing and therefore from the credit card's company's point of view, is the merchant.
If PayPal is going to charge all those fees for processing (talk about nickle and diming!), I would argue that they should take the risk of fraud. Otherwise, there really is no point in using them, is there.
Re:have not used paypal in 3 or 4 years (Score:3, Insightful)
Re:Has anyone asked.... (Score:5, Insightful)
Well, first you put something out there people want to play, then people like me pay 10EUR for it, and ...
Re:When is a bank not a bank (Score:2, Insightful)
I only ever used it for eBay, so I just stopped using eBay.
Ditto.
I haven't visited PayPal or eBay in at least a half a decade. My world didn't implode.
Re:PayPal has done this forever (Score:3, Insightful)
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.
Re:Has anyone asked.... (Score:3, Insightful)
probably he found a big gold vein while mining
People still use pay-pal? (Score:3, Insightful)
Seriously, do they doubt the veracity of the horror tales?!
Re:When is a bank not a bank (Score:2, Insightful)
Re:Maybe we have our answer? (Score:3, Insightful)
Exactly. What does preventing theft get Paypal? They have their cut already. This was because 600,000 euroes went into the account, not because 600,000 euroes went out of it. Where's the profit in freezing an account with nothing in it?
Re:When is a bank not a bank (Score:2, Insightful)
Re:People still use pay-pal? (Score:4, Insightful)
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.
What else but PayPal? (Score:5, Insightful)
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.
Re:PayPal has done this forever (Score:3, Insightful)
Exactly, how can they "lock" an account and still allow incoming deposits? It is ridiculously stupid behavior at best.
This is all Meg Whitman's fault. (Score:5, Insightful)
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.
Re:When is a bank not a bank (Score:3, Insightful)
Probably because in many cases they can't find a better solution.
Re:People still use pay-pal? (Score:5, Insightful)
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.
Re:When is a bank not a bank (Score:3, Insightful)
Ah, yes, its those horrible Fat Cats and their Reptilian Overlords. Down with Capitalism! Free love and free weed are a human right!
I mean, it couldn't be just a case of there being very little demand for wire transfers due to the pervasiveness of credit cards, resulting in higher fees on a per-transfer basis. No, that's FAR too unlikely.
Re:When is a bank not a bank (Score:3, Insightful)
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 can understand that. A lot of "merchants" these days are consumers who occasionally sell as well as buy stuff off of eBay. It's natural for people who think of themselves as consumers rather than merchants to have a consumer's attitude toward fraud: if I'm honest, then fraud should be somebody else's problem.
The closest I can come out to this being the bank's fault is that (a) they encourage consumers and merchants to use their services with the assurance that the system is safe and (b) the credit cart companies have opposed laws that would reduce fraud but make using credit cards less convenient. These are rather thin justifications.
Re:What the hell *is* Minecraft? (Score:2, Insightful)
It sounds exactly like Spore was supposed to be.... a really huge sandbox with tons of possibilities.
Re:Has anyone asked.... (Score:3, Insightful)
Re:PayPal has done this forever (Score:3, Insightful)
No, it's ridiculously lucrative behaviour.
Re:Payments continued? (Score:3, Insightful)
why can't he delete the link from his website? That would kill new payments from all but the most determined of people.
Re:When is a bank not a bank (Score:2, Insightful)
Horseshit. The lawyers took the same percentage from the settlement as they would have had they gone to court and won. And that percentage was not a secret amount undisclosed to the people who willingly made themselves a part of the class action. They were perfectly free to go after Paypal on their own if they didn't like the terms.