How PayPal could have killed my independent conference (if I had trusted them, which, thankfully, I didn't)

If you've been following my tweets, you'll know that a few weeks ago PayPal froze my account without notice. This is the business account for my company that accepts payments for Update 2011, the independent mobile conference I'm organizing in Brighton this September as part of the Brighton Digital Festival.

PayPal freezing accounts is nothing new. They do it all the time. And they've done it to other conferences also, including dConstruct, and more recently to Remy's Full Frontal.

After keeping our account frozen for two weeks (during which time I had to send them proof that I wasn't a fraudster) they decided to unfreeze it. With a little catch: they implemented a "90-day 100% rolling reserve". What does that mean? It means that they keep all the money you have in your PayPal account for 90 days. So the ticket sales that are in our account now? Over £11K of them? Yes, they'll keep all that for two months after conference. (I spoke to Emmanuelle in their credit review department today who said that they would give 50% of it to me the day after the conference and 25% a few weeks afterwards but I'm not sure I believe them. It says nothing to that effect on the account.) Regardless, I don't know what planet PayPal are living on.

PayPal must inhabit some strange alternate universe where cash flow isn't an issue for businesses. In PayPal's alternate universe, venues and airlines apparently accept 90-day credit terms.

Thankfully, I knew about PayPal's reputation and I had been keeping a voluntary 25% reserve in my account for possible refunds and withdrawing the rest to my bank account on a regular basis. Yes, because of their reputation – because I didn't trust them – I was keeping my PayPal balance as low as I was comfortable with and thus depriving PayPal of interest on my balance too. (In case they need more evidence on how their policies are hurting them.)

So, ironically, because I didn't trust them, they weren't able to ruin my conference. Can you imagine what would have happened if I had trusted PayPal and left all the ticket sales in our PayPal account? We would have been royally screwed.

As is, thankfully, I have enough in the bank to cover the remaining payments for the conference even without the £11K or so that PayPal are keeping hostage. But it makes things more painful for me and means that I have dig deeper into my own pocket. Not what you really want as an independent designer/developer who is trying to stage a beautiful and affordable conference for the local community.

What this whole ordeal has meant is that I've lost several days – days that I could have been devoting to making the conference even better. That PayPal can treat independent businesses and conferences like this is utterly disgusting and unacceptable.

Oh, and I'm not taking it lying down.

As of today, I switched our event to use EventBrite's own credit card system. This wasn't straightforward as I had to create an entirely new event on their system by cloning the old one and then changing its short url to the old one. It means that I now have to manage two event databases for the conference and adds to the administration work involved and complicates registration on the day (we can't use the cool EventBrite mobile app and have to do manual registrations).

From now on, I am not giving PayPal a single penny of my money. Once this ordeal is over and we've received all our money, I will be shutting down my PayPal account for good. (I've been with PayPal for over ten years and our current business account has been with them for six years. During that time, I've put through hundreds of thousands of pounds worth of business through it. So yes, it wasn't millions – and is probably chump change to them – but still, they won't get a penny more.)

Thank-you all for your help and support through this.