This is something I've seen as well - PayPal does not like the idea (for some reason) of people using their service for events. I'm personally aware of two event coordinators who had large sums of money tied up by PayPal at the last minute (around $10k and $20k) so that I never used them for my own events. Stripe all the way, never a problem.
I gather that PayPal's secret to success is strong anti-fraud measures (and not caring about false positives), and one of them is freezing accounts that get a flood of money all at once. That also is a pattern you see in events and charities set up for a new disaster.
PayPal does not consider conferences a "false positive". Small events often fail: the speakers cancel, the venue falls through, not enough people buy tickets to cover costs... if you are using incoming ticket money today for things, you are essentially taking investments, not payments. PayPal's response to this is to hold most of the money until one day after the conference, as otherwise, when your conference fails, and the attendees make a ton of chargebacks, they know they are going to not be able to get their money back and they will be out thousands of dollars.
This is not unreasonable behavior on their part, and is part of a very consistent pattern of response: they don't let you use their service to sell promises of any kind. This actually leads to PayPal being very user-focussed--essentially always protecting users from even having to think about whether something might end up stealing their money--which is actually good for those for users, and by proxy, good for those of us who use PayPal to sell legitimate products.
(FWIW, you can use PayPal to sell event tickets, but be prepared to appreciate what is happening in the mind of PayPal--which should hopefully cause you to not being unreasonable or abrasive in your communication, though even if they were being bad that isn't an excuse to get angry at them--and reach out to their underwriting department to prove you are financially solvent in a way that doesn't rely on the success of the event, and preferably also provide evidence that your event will also work.)
> be prepared to appreciate what is happening in the mind of PayPal--which should hopefully cause you to not being unreasonable or abrasive in your communication, though even if they were being bad that isn't an excuse to get angry at them--and reach out to their underwriting department to prove you are financially solvent in a way that doesn't rely on the success of the event, and preferably also provide evidence that your event will also work.
The problem with this is that people do jump through all of these hoops (and more) and still wind up with their money frozen for interminable periods of time. That is the source of frustration and anger with PayPal - legitimate businesses jumping through every hoop and still winding up with frozen funds, held for at least 6 months.
> This actually leads to PayPal being very user-focussed
For s/user/buyer/: I'll add the notable exception that is the root of this complaint, virtually everything about the Buy It Now business. There are the parts of the complaint, and then there's the fact that they've been badgering desktop users for long years to sign up for their credit service by making the Paypal user experience suck every single time you interact with them. It's almost amazing to me that it was actually worse for anyone who ever clicked "Yes" on one of those infernal dialogues.
I have rarely found a company's user experience so systemically hateful as Paypal. To the point where, if there is virtually any other option for payment, I'll take it.
On the other hand, that's the normal way of running small events. There are a number of annual events that don't have a limited company organizing the thing and can't raise a 10k-100k float from those organising it; they have to operate in this manner.
You have however confirmed the value of having a "sweep paypal money into an unconnected bank account ASAP" operations rule.
I do wonder whether anyone's ever taken them to small claims court over an event like this and won, possibly by default.
(The original article is a straightforward violation of the Consumer Credit Act, I believe)
If the event 'has' to operate in this manner, how will the event organizer provide refunds should something happen and they have to cancel their event?
I ask because planning an event in my 2nd hand experience of weddings and such usually involves more than a few non-refundable expenses, which seem like they would prevent them from being able to provide a refund to everyone in the event of a cancellation.
I mean it just seems like Paypal's established practice, of tying up event money unless it is proven that the money isn't actually needed and will remain available in case of a charge back, is a pretty reasonable one. I mean I have been written bad checks by roommates for rent before, it is pretty damn hard to get money from people who don't have it so despite taking legal action I still haven't seen any of the money, I feel like Paypal is potentially preventing many instances of this.
Edit: Thinking back on it many of the small events I have attended ask for a $X donation from people, who in return will receive a ticket. This seems like it would get around the issue in the same way Kickstarters which don't deliver avoid the issue.
> If the event 'has' to operate in this manner, how will the event organizer provide refunds should something happen and they have to cancel their event?
One method would be for one of the things purchased with the current payments being insurance.
Did not know such a thing existed, thanks. However as a minor clarification on what you said, after reading over a few descriptions by various providers it is clear however that the insurance itself would have to be purchased by the event organizer and reimbursed through the current payments, as the event insurance cost itself is not covered by event insurance. At least not in any of the lists of nonrefundable reimbursements I am looking at, so it would represent a small amount of money risked by event organizer.
So as long as an event organizer has bought event insurance already, and proves that to Paypal, then yes they should release the money.
This all makes perfect sense. My only problem is that this is not communicated with the seller clearly. If it is a stated policy that Paypal will hold the host of a conference's money until the event materializes to cover their costs then no party involved has a right to feel cheated. Instead Paypal is classifying this risk which is inherent to their business, which is the risk of the conference materializing, as fraud. This, in my opinion, is diseptive
>though even if they were being bad that isn't an excuse to get angry at them--and reach out to their underwriting department to prove you are financially solvent in a way that doesn't rely on the success of the event, and preferably also provide evidence that your event will also work.)
This works well for only the paying side of the user base. Yes, PayPal is a very convenient way to pay, e.g. in an Internet store.
Those who receive the money have much harder time, though. All complains I saw were from guys having their accounts frozen when money pour in too fast.
Most likely, the other providers have not achieved the same level of "success" that Paypal have, and therefore haven't reached steady state in terms of risk losses. Or, they have painted themselves in a corner by advertising that they are much more business-friendly than PayPal, and are taking losses on the chin in the hopes of growing/inventing their way out of the problem.
Why has PayPal not started some sort of program (extra verification, etc) so that legit people attempting to do these things can use them without running into anti-fraud?
As long as we're accumulating anecdotes: I run the website for an organization that puts on shows every month. We sell tickets through Paypal and have never had a problem. We're talking hundreds of $s rather than thousands, though.
