The setup:
We didn't have a choice of different payment method. Our campaign was fixed funding and that allows only PayPal to be used for money transfer from Indiegogo.
I started a PayPal account shortly before the Indiegogo campaign started. The account is connected to my bank account in the Netherlands (I used to live and work there). In the Czech Republic the currency is CZK and PayPal fees to convert from euros / dollars to CZK are just ridiculous. And we need the money in euro anyway (we pay for a lot of freelance work in Euros). My bank account in the Netherlands is valid and I have passed the PayPal validation in this regard as well. However I don't live in the Netherlands anymore so I filled in my old address where I used to live.
We don't have any company / studio or anything. We did the Indiegogo because we desperately needed to verify whether this whole project has any meaning at all. And we spent long time in full time development without an income and burning through our savings. Therefore the PayPal account is simply a Premiere account (not business / merchant / etc.). We haven't looked up enough information about the whole problematics. I feel responsible.
The main act:
Soon after our Indiegogo goal was met we started actually receiving the payments on the PayPal account.
Yesterday (1st of March 2013) in the evening we have received a note that our PayPal account has been blocked. This message was automatically generated. They haven't told us we are fraud. They simply locked the account and we are not allowed to withdraw / send any money. We can still receive the money though. They said this is according to the EU regulations and that we are supposed to further identify ourselves once the incomes on the PayPal account surpass 2500€ / year. I don't blame PayPal for this, however I find the whole process rather unfortunate. Also we haven't received any personal email or anything. It all came from the system.
I went through the automatic verification procedure. However it failed in the step when I was supposed to verify my Passport / ID against the address. I have contacted the PayPal support by email and explained them the whole problematics and asked them to contact me as soon as possible to resolve this situaiton. I haven't heard from them since. I have also tried calling them but their phone support works mon - fri 9 - 5. I suppose the timing couldn't be worse (last 48 hours + the weekend).
So we sort of panicked. We read a lot of horror stories when PayPal users had their money blocked for 180 days or accounts were simply deleted. We made an update and asked the users not to back the project at the moment. We were getting a lot of contributions on the Friday. For us the worst case scenario was actually the project getting loads of attention in the last 48 hours, raising reasonable amount of money and then those money ending up being locked / taken by PayPal.
The aftermath:
We will be looking into ways to setup the payment on our site to allow users pre-order Factorio. We have actually already implemented the system to use PayPal. However after this experience we decided to scrape it. Even if the things go well at the end. Having the account suspended without a personal note and no follow up is something I don't feel comfortable with.
We are happy for any inputs / ideas you guys might have regarding this issue.
EDIT (March 9 2013):
Ok the story continues
A week ago our account was blocked for the first time. Then it was released on tuesday or so. And yesterday it was blocked again. This time for a different reason. Namely because "they need to make sure we will be able to provide services we promised to our customers". We were asked to provide information regarding our business model (what goods / services we offer, expected monthly payments for the next 6 months and what delivery method we will be using).
It is funny that they want to make sure that we deliver to our customers and do that by blocking our funds which effectively means we will have troubles delivering to our customers.
We are sorry if this information is not officially looking, but the whole thing looks like a joke to us. Anyway we have spent a good deal of time on the phone explaining to their support how Indiegogo works, what are we doing, what the game will look like, etc. The lady at the support was very helpful and might even download the demo
She promised to escalate the matter to the appropriate department immediately.We will see and let you informed about how the situation unfolds. To be fair PayPal gave us a chance to withdraw the funds collected in the indiegogo campaign (there was like a 3 day window when our account was not blocked). However we couldn't do that for the legal reasons - we can't accept any transfers to our bank account before we get "a bussiness license" (which should happen next monday).
We are sure we will be able to resolve this issue as well. It is a bit painful to spend energy on things like these however. Please don't take this update as a reason to start PayPal bashing discussion:) We announced it because we want to keep you informed what is happening with the funds you guys provided us. And also the information "leaked" somewhere else on the forum so we though it would be appropriate to announce it here.
