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.


admin said...

We started contacting some of our clients and are hearing that those who have been using DashBook's PayPal payments have not been cut off. It appears that they are grandfathered if they used it regularly.

Office said...

We found this out at about 6pm on the 30th, just hours before payments had to be out. Lucky for us we found a work around but now I can't help but worry that MassPay won't be an option come 4Q royalty payment time.

Anonymous said...

We have a relatively new Paypal account (Standard Business)(and we only use Paypal Standard, not Pro). We finished our final testing of MassPay in the sandbox yesterday. When we told it to go live, we found that the MassPay was disabled. So this morning we made one phone call to Paypal merchant services, and they enabled MassPay while we were on the phone. To put it in perspective, we have probably processed a total of $400 through Paypal so we're not a large company. Enabling the MassPay took effect immediately. I have seen that if you don't ask for merchant services when you call their customer service line, they have no idea what you're trying to do. Other than that, don't give up hope. Just call their merchant services and ask them to enable MassPay.

admin said...

Just received another update from a DashBook client:

PayPal changed the rules so that someone who has received at least $3000 per month for the past 3 months is eligible for PayPal MassPay.