Earlier this afternoon, I started seeing a bunch of tweets from science fiction writers and fans about what looked a big screw up at PayPal. Author Jay Lake has been fighting cancer since 2008, and to raise money for a new treatment (whole genome sequencing), he pulled together a number of big-name writers to perform “acts of whimsy” when different funding levels are reached. (For example, fantasy author Neil Gaiman offered to cover a Magnetic Fields song on the ukulele if fans donated $20,000.) Within 24 hours, the campaign seemed like a big success, shooting way past the $20,000 goal.
And then PayPal froze the account associated with the campaign, blocking Lake’s access to the funds.
This seemed terrible in pretty much every way. For one thing, PayPal has faced other controversies over frozen accounts, like those of Regretsy and Diaspora. It was enough to make TechCrunch writer Josh Constine declare more than a year ago that “we’ve lost confidence in PayPal.”
In this case, however, PayPal didn’t let the situation drag on. Within a couple of hours, the AskPayPal Twitter account responded, saying that it was “looking into the matter,” and then the company called Lake and unfroze the account. Senior Communications Director Anuj Nayar said PayPal also apologized for the mistake and that both he and the company are donating to Lake’s fund.
This is part of a larger shift, Nayar said, something he attributed to PayPal President David Marcus (a role that he took on in April). During our conversation, Nayar repeatedly referred to a “new PayPal” and to “a whole new world” where this kind of controversy can explode immediately on social media.
But if it’s a new PayPal, why did this happen in the first place? Nayar said he’s still learning the details of the case, but he added, “It’s clear we made a mistake, and we fixed it as quickly as we could.” The company has done work behind the scenes to cut down situations like this, but at the same time, with 6 million transactions per day, they’ll never be eliminated entirely, he said. Nayar also plans to do more to “open the kimono” this year, so that people have a better sense how the process works.
“We’re going to do a lot more communicating before making some pretty aggressive changes to our system to make sure that this stuff doesn’t happen,” he said. “At the same time, when we find out we’ve made mistakes, we’re committing to get it fixed and apologize.”
By the way, if you want to follow Nayar’s example, Lake is still accepting donations here.
PayPal is an online payments and money transfer service that allows you to send money via email, phone, text message or Skype. They offer products to both individuals and businesses alike, including online vendors, auction sites and corporate users. PayPal connects effortlessly to bank accounts and credit cards. PayPal Mobile is one of PayPal’s newest products. It allows you to send payments by text message or by using PayPal’s mobile browser. PayPal created the Gausebeck-Levchin test, which is an implementation...