As far as I understood the paypal payments came in as part of the IGG campaign, not separate from it. So the Ubuntu Phone campaing would face the same problem. As would face any other IGG campaign. I seriously don't understand the rationale behind that:
a) either Paypal/IGG can afford the risk
or
b) issues like this will crop up again and again and again, leaving frustrated businesses and a bad impression behind, regardless of who's technically to blame.
or c) I'm missing some point here.
The other thing I'm desperately trying to understand is why PayPal claims that the refund risk is high. Almost all benefits given by the IGG campaign are intangible or of neglectable value compared to the funding you give. The first tangible item starts at the 67USD tier (a postcard from iceland [!]). Later items include a T-Shirt for 256 USD and some overpriced USB-sticks. If someone at PP actually read through the descriptions, it would be pretty obvious that any backer was aware of what he's doing.
"PayPal's position particularly ridiculous when contrasted with IndieGoGo's policy of transferring all funds to successful campaigns within 15 days of their conclusion. If IndieGoGo can do it, so can PayPal."
This seems to me to imply that the PayPal fundraising was done in parallel to IndieGoGo.
"The bad news is, PayPal have frozen our PayPal account. This means roughly $45,000 of the $135,000 we have raised so far are in a state of limbo and we don't know when we will get access to the money"
And the campaign is currently at 137.000 USD. IGG offers PayPal as payment method along with CC payment and from what I've gathered those funds are handled via PayPal. AFAIK the funds at kickstarter are split in a similar fashion depending on the payment provider.
The gist is: For flexible funding campaigns the amount given via PayPal are transferred directly to the campaigns PP account (minus the fees obviously). For fixed funding campaigns the given amount is transferred after the campaign meets the funding goal. Money given via direct Credit Card payment will be cashed out after the campaign reaches its deadline and should arrive within 15 business days.
Mailpile is a flexible funding campaign, so the first rule applies and funds are directly placed in their PP account.
a) either Paypal/IGG can afford the risk
or
b) issues like this will crop up again and again and again, leaving frustrated businesses and a bad impression behind, regardless of who's technically to blame.
or c) I'm missing some point here.
The other thing I'm desperately trying to understand is why PayPal claims that the refund risk is high. Almost all benefits given by the IGG campaign are intangible or of neglectable value compared to the funding you give. The first tangible item starts at the 67USD tier (a postcard from iceland [!]). Later items include a T-Shirt for 256 USD and some overpriced USB-sticks. If someone at PP actually read through the descriptions, it would be pretty obvious that any backer was aware of what he's doing.