Can we save KIVA from PayPal?

[Guest]

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[et7]

I am an avid supporter of KIVA and approach my 300th loan.  I have recommended time and again KIVA to friends, colleagues and business partners. I was thoroughly shocked to read from the newspapers that PayPal - the one and only payment channel to/from KIVA - has fraudulently blocked the account of Wikileaks and a Wikileaks supporter named Wau Holland Foundation. They have simply confiscated (read: stolen) the money of Wikileaks.

I do NOT intend to discuss the Wikileaks case here. The point is NOT, whether Wikileaks is good or bad. The question is, whether PayPal is reliable and trustworthy or criminal.

Until today, there is NO LEGAL CASE filed against Wikileaks worldwide. Even the fraudulent arresting of Julian Assange is officially NOT related to Wikileaks. Therefore Wikileaks is still a perfectly legal organisation. The same applies to Wau Holland Foundation (German non-profit organization collecting money for Wikileaks): perfectly legal, even tax exempt. So PayPal has without any justification blocked (stolen!) the money of a perfectly legal client. I don't know how you qualify such behaviour. To me, it is simply criminal.

How can we ever trust the Non-Bank-Bank PayPal, an organization that is NOT subject to bank law but nevertheless works like a bank, that by an act of sheer arbitrariness confiscates the money of a client? Out of blue sky?? What guarantee do we have that PayPal will NOT do the same with your funds, my funds or KIVA funds? Can you guarantee that PayPal does not freeze MY account on the pretext, that my views are politically incorrect, or that somebody somewhere has alleged that I have behaved badly?? 

Who would protect KIVA, if - say - some misguided American journalist would trumpet that there are irregularities in the way KIVA handles the money from/to lenders and entrepreneurs? It's really difficult to PROVE that you do everything right - even if you are perfect. How could KIVA defend itself - within reasonable timeframe - when such proof would require days of meticulous scrutiny of all books and transactions by a renowned auditor?  International media do not give you that time to defend your reputation. How long would it take PayPal to block all funds of KIVA??

Can we - after the behaviour shown by PayPal - ever be sure, that PayPal will NOT  "just as a precaution" freeze all KIVA funds, if they get a call from an influential American politico?
 
Trust needs time to grow, but may be destroyed in an instant. Personally I currently restrict myself to reinvest the funds already with KIVA, but the additional Investment I planned for Xmas remains blocked as long as there is no other way than PayPal. And I see myself forced to withdraw all funds from KIVA if PayPal remains the only alternative.

I wrote to contactus@kiva.org and asked them to open up another channel to send/withdraw money to/from KIVA. I got a polite and 200% politically correct answer:

PayPal is responsible for making decisions that make the most sense for the well being of their organization. Kiva also acts in the best interest of all parties involved in the fulfillment of our mission (http://www.kiva.org/about). PayPal provides us with free payment processing, which saves us around one million dollars each year and allows us to have a greater impact for entrepreneurs around the world. 

That being said, Kiva will continue to use PayPal to process all financial transactions.

Put in a nutshell: PayPal is for free so we don't care. So much from KIVA staff.

I completely agree, it was PayPal, not KIVA that took that misguided decision. But KIVA partners exclusively with PayPal and that's the problem. Would you support an organization that not only deals occasionally with the mafia, but insists that you hand them your money? Well, I wouldn't. Because of the strong and exclusive link from KIVA to PayPal - and I understand that KIVA  profits from their free services - KIVA is (partially) affected by misbehaviour of PayPal. If you do business with the mafia, you look like a mafioso, even if you see yourself as a saint!

I love the KIVA approach. But I really fear that banding up with dodgy organizations like PayPal calls for trouble. Has anybody here an idea how to save KIVA from PayPal?

  Thomas / Zurich-Rorbas / Switzerland

[Henry]

First time post.... no KIVA page linked to your name.

give me something that gives you credentials so I'll know you aren't just a paypal basher.

the above is not meant to discredit you or your post - just to add credit to it.

[et7]

ok Henry - I finally found out how to link my lender page. I updated my profile. You may even look in my face now.
Further - I copied the following from my Portfolio Page. As of today:
                                                     Me       Avg. Kiva User*    
Number of Loans Made                        269       6.5    
Number of Successful Invitations           5       0.24    
Number of Loans Made by My Invitees   42       1.07
Total Amount Lent                        $20,625.00    $219.62

I do not show these figures to brag, but to prove my claim that I care about KIVA.
(It's relatively easy to be generous when you live in a country of banks and high average income.)

Better now?

:-) Thomas

[Henry]

much better - and your not bad looking  LOL

there have been many paypal bashers on KF in the past - hope you can understand my request  

now....  do I think KIVA should open another route for handling in/out transactions- yes, however, I see where there would be more cost involved - so it should be another route in which the KIVA member would be willing to bear any fee involved.

edit...  I was going to say - how Paypal handles wikileaks is their business - however.... if I ever heard that Paypal has stopped transactions from members or of the many organizations i'm interested in -- I'd be pissed - I'm just not interested in Wikileaks.   

[et7]

Update: On my critical reply to the first answer from KIVA I got a second one a few minutes ago:

Hello Thomas,  

Thanks so much for your reply.

If you wish not to use PayPal to add additional funds to your Kiva account, we can provide you with information to wire transfer funds to Kiva. You can also continue to just re-lend the Available Kiva Credit in your account to new borrowers, and thus not use PayPal for any further deposits into your Kiva account.

Please note, however, you will need to use PayPal in order to withdraw repaid loan funds from Kiva, so I would encourage you to keep this in mind when adding any new funds to Kiva. Kiva cannot deposit funds from your Kiva account back into your personal bank account.

Best wishes,
Laura Piper
Customer Service Coordinator

It does not solve the problem.
My best guess is that they are willing to accept money any way it comes, but in principle KIVA relies on a fully automated system. It would not be possible to handle that amount of transactions manually or even semi-manually. From my experience as an IT consultant with one of the largest international banks I know that the staff solely concentrates on problems, troubleshooting, error correction and the like. The transactions themselves are 100% run by machine. (If you have > 1 million payments / day there is NO other way.)

Now I suppose that the IT-system of KIVA is closely linked to that of PayPal to automatically book in- and output payments.

Of course I would be willing to pay a reasonable fee (say 10 USD) for "manual" transactions directly to/from a KIVA bank account. This channel would be more for the 200 USD and up amounts, not for transfering 25 USD minimal loan. For a typical Swiss bank a transfer to an account in the US is 5 CHF (about 5.50 USD). That's acceptable.

I do also understand that PayPal uses KIVA to build traffic and enlarge their user base. So PayPal is not completely free to KIVA, but more of a reciprocity - and usually a win-win. Too bad, PayPal has such a shortsighted, America-centric management.

I still hope that others will help convince KIVA to open up more channels than PayPal.

:-) Thomas