Thursday, November 3, 2011

PayPal discontinues MassPay

Normally when someone who is evaluating DashBook asks why they cannot send out royalty payments directly via PayPal through our software, it is because they simply did not set it up.  It is a very quick and easy procedure consisting of logging in to one's PayPal account and requesting API signature information which provides the credentials that DashBook needs to communicate on behalf of their business account.

PayPal's MassPay does not work with personal accounts, so an upgrade to Business or Premier might be required.  Why does DashBook use PayPal's MassPay system for electronic payments?  MassPay is a great way to handle paying a handful or hundreds of royalty holders at once.  It also fits nicely in the business model, as the sender pays a fee that is comparable to or cheaper than mailing costs, and the recipient receives the full funds without additional fees removed.  Other methods of PayPal payments would have the royalty holder receive less than the royalties due.

PayPal MassPay has been a great system for DashBook users, who are primarily book publishers and music labels right now, although of course our system handles many more businesses interested in tracking royalties and licenses.  It is very simple and easy.  One screen shows all of the royalty amounts owed for the period chosen, and one click can fire off all of the payments and record that information into DashBook for account balance purposes.  Life is good.

So when one of our new book publishers started asking about her inability to use PayPal, the answer seemed obvious.  "Go to this PayPal website page to get your account information; paste it here in DashBook."  Ah, but not so easy this time! Her PayPal system didn't have MassPay activated, and calls to PayPal resulted in her telling us that PayPal has discontinued MassPay for all but huge corporations.

What?  Isn't PayPal for the little guys who don't already have large systems setup?  If your company is already large, wouldn't you have EFTS (Electronic Funds Transfer - like direct deposit) to handle all your needs?

Well, after spending hours on the phone with various PayPal personnel, it looks bad.  Whether their decision is due to "abuses" or "high risk" (their terms), they have indeed disabled MassPay from the majority of their accounts while leaving it intact for a handful of large multinational corporations.

This is huge news.  Why isn't there outrage everywhere today?  Maybe because they did this months ago, and perhaps our clients that use this feature only pay quarterly or semi-annually, etc.
[Edit:  It appears those using it regularly have been grandfathered.]

What did PayPal recommend that we do?  Trash our MassPay API program code, and rewrite it for their alternative Adaptive Payments style, which puts the burden on the recipient for the fees -- and those fees are much higher than the $1 USD cap that MassPay has.

If you've used MassPay, contact PayPal immediately to see if they will re-instate your account. [Edit: First go to your account, select Send Payment, select MassPay, and see if yours is disabled.]

If you have experiences about this, please reply to this post so that we can all learn.  Unfortunately, change is not always for the better.