Today our PayPal funds would have been unfrozen
It was exactly 180 days ago that PayPal froze all money in our account during our MacGraPhoto bundle sale. It was a very negative experience and would’ve been much worse if my elaborate blog post about this didn’t make it first page of reddit with more than 200 comments, first post on Hacker News and a mention on Daring Fireball. All the negative publicity that PayPal had received pushed them to promptly unfreeze my account, even without me asking again (for the 10th time).
What would have happened if they money wasn’t unfrozen?
First, it was a substantial amount. Moreover, most of it was money we had to transfer to our partners, so we would have needed to open our savings. Also, it would have put additional financial pressure on me, since I had left my day job only several months earlier and our family income was (and in fact, mostly still) lower than our expenses.
It wouldn’t have allowed us to participate in application acquisition opportunities and, most probably, we wouldn’t have acquired Blast. It could also limit our ability to pay to freelancers for graphics and other services.
In additional the limitation on my PayPal account also prohibited to use it as a personal account. I use it for personal and other business transactions from time to time. After all, PayPal is still the easiest way to transfer money between different people around the world.
As a business, we still use PayPal when it’s not possible to do otherwise. We no longer use PayPal as a payment processor on our site but FastSpring, which we now use, does offer PayPal as one of the payment methods. We still transfer money through PayPal to third parties and we sometimes get paid through PayPal when we participate in other sales channels, like other bundles.
For MacGraPhoto 2 which we plan later this year, we’ll probably go with FastSpring which allows to split the money between participants upon purchase, which will solve several problems at once – we won’t have to keep other people’s money and it will simplify accounting by reducing our gross income.
May 20th, 2010 at 1:37 am
Now the question is: 180 days after shifting to FastSpring, are you happy with their service?
May 20th, 2010 at 1:54 am
Hi Zviki.
Yes, we are happy with their service.
We are happy with the level of support that they provide.
They are also updating their store backend quite often, at least once a month, with new features and bug fixes.
Their fees are higher than paypal but I believe you could negotiate somewhat as well.
They have better management of varios promotions and cross-sales that you can do, which is something you can’t do easily with PayPal, even with e-junkie.
The really interesting test of their system will be when we’ll try to use it for MacGraPhoto 2, since it’s a more complicated setup where money should be split. We got hit by PayPal partly because we had so much money coming in into our account in short period of time, simply because we were collecting and distributing the money. This also means that everything was much income and expenses from tax point of view. I hope with FS we’ll be able to overcome this since they offer split accounting. We haven’t looked deeply into it yet, though.