> What on earth does PayPal care about the financial planning of the recipient of the funds? This doesn't seem like it has anything to do with fraud detection.

Because PayPal provides users with the option to ask for refund which can be very expensive for them. If they deem the risk is too high they won't do business with you.

It seems a bit late in the day to decide not to do business with you if they've already taken money on your behalf.

No further business. The money they have frozen they are holding in escrow to help the increased risk of refunds.

The alternative is to shut down payments in the middle of a launch. Which Paypal will do, and it's not like people like that any better.

IndieGoGo offers PayPal as an option. Many people prefer it, for various reasons. The funds donated via. credit card directly on IndieGoGo are still available to us.

Maybe you can show Paypal this, demonstrating you are carrying a large share of the risk as well.

It's all risk containment for them. I'm a bit surprised that you would write such a confused blog post about the freeze, isn't it common knowledge that this happens with all Paypal accounts that do not deal in (existing) physical things?

I, for one, had no idea

The post doesn't have a lot of info, but the only rational explanation I can think of is that Paypal believes Mailpile is a scam intended to solicit donations through false pretenses.

Have a large number of donors issued charge-backs (or whatever the paypal equivalent is)? Has Mailchip missed some sort of deadline that might have caused donors to complain to paypal? Regardless of any of those things this action seems on the surface to be a huge overreach by paypal, but at least in those cases it would make some kind of sense.

Also, I assume there's something in the paypal use contract that gives them authority to take this kind of action? Clearly not a good idea to keep any significant balance in a paypal account.