Liberapay is in danger of closing

[Changaco]

[Update] Do not share this issue on social networks, we will do so ourselves if and when it becomes appropriate.

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Copy of https://github.com/liberapay/liberapay.com/issues/374#issuecomment-393617792:

I have just received an email from mangopay saying that they want to terminate their contract with us because we have/had a few controversial users.

I've replied, asking for confirmation, and information on how much time we have left.

As you probably know Liberapay cannot operate without a properly licensed payment partner, so if Mangopay really has decided to ban us then we're in trouble.

ping @liberapay/codirectors

[aggsol]

Awwwh FUCK! What can we do now? Alternatives?

[Changaco]

I'm currently looking into all the alternatives I can think of:

• contract with another licensed e-money emitter like HiPay (Marketplace) or Stripe (Connect)
• get our own e-money license and use a lower-level payment processor like Braintree (Marketplace)
• attempt to avoid the need for an e-money license by turning Liberapay into some kind of international cooperative

[Changaco]

Getting our own license is out, there's a minimum capital requirement of €350k.

[jorgesumle]

attempt to avoid the need for an e-money license by turning Liberapay into some kind of international cooperative

That's doable, but it could take more time than the other alternatives and some legal knowledge.

contract with another licensed e-money emitter like HiPay (Marketplace) or Stripe (Connect)

I guess that's the easiest thing for the short term. For the long term, we should be prepared for similar issues with vendors.

[mattbk]

Hate to suggest this, but are they not open to Liberapay booting the users to buy some time?

[Changaco]

@mattbk Whenever Mangopay is unhappy with a specific user they order us to close that account. This is what they did yesterday, and if I remember correctly it was the 3rd time since Liberapay's launch, but this time they're kicking out everyone else too.

[Changaco]

I haven't received any confirmation from mangopay today, which means that we probably won't get it before Monday at best.

[Changaco]

The user they ordered us to ban yesterday joined Liberapay two years ago and has received less than €400 since then. It's unclear how Mangopay "found out" about this controversial user, they may have been contacted by a third party.

[trebmuh]

Practical question here: what does that means/involves for the current users with money in their wallet if Mangopay is going to terminate the contract with LP?

[Changaco]

Mangopay would have to repay all users by doing refunds or payouts.

[Changaco]

Actually if I'm interpreting the contract correctly they have to contact all users to ask for consent to close the wallets and instructions on where to transfer the funds.

[Changaco]

Other alternative:

• avoid EU regulations by operating from the US like Gratipay did

[aggsol]

The sole reason I joined Liberapay was because it is EU based and operating in the EU. Especially that SEPA transactions just work. This is horrible.

[Changaco]

This issue is now being shared on social networks. Doing that is inappropriate at this early stage.

[albjeremias]

I'm not sure.. but might be relevant: https://fair-coin.org/en/use-cases

[tuxayo]

@Changaco

Doing that is inappropriate at this early stage and only sends me a signal that discussing sensitive matters publicly is not a good idea.

I'm not sure. Such transparency and open discussion also build trust. There might be a balance though.

Thanks for your work in handling all this mess.

[jelv]

I hope you can work it out with Mangopay. How would the cooperative work for Liberapay?

[Changaco]

The basic idea of the "cooperative" alternative is that everyone who receives money on the platform would be a member of the Liberapay legal entity, and that all the collected funds would legally belong to that entity instead of to each individual user. This should remove the need for an e-money license since we would no longer be holding money that belongs to someone else.

This model would require rewriting the bylaws, the rules of procedure and the terms of service of Liberapay. We would have to completely abandon the neutrality principle and approve all members manually like Gratipay did.

[jelv]

Is Adyen MarketPay also a option?

[Changaco]

@jelv Probably not, but I've added it to the list in https://github.com/liberapay/liberapay.com/issues/374.

[MartinDelille]

Do we really need to close the website if Mangopay block us? We could just pause the service, inform everyone no?

This would have a massive effect on the social network and would be a very bad buzz for Mangopay. Its marketing service will face a communication crisis and we may have argument to reactivate Liberapay then (with a short cutage in the service).

Can we handle such cutage technically?

[jelv]

For the people on the platform continuity would be best option.

If we could change to another supplier it would be good to know how they handle our neutral position. Has there been in contact with other e-money emmiters on this topic?

[Changaco]

@MartinDelille Having a "bad relationship" with our payment partner is not a good idea. If Mangopay doesn't want to work with us, then we don't want to work with them.

@jelv I haven't initiated any contact with potential new partners yet.

[Changaco]

Regarding the neutrality issue, I did notice this:

(Screenshot of https://www.solarisbank.com/en/.)

However just because we use the same word doesn't necessarily mean that we're talking about the same thing.

[Changaco]

It's been two weeks, I haven't received any email or letter from Mangopay.

[mattbk]

It's been two weeks, I haven't received any email or letter from Mangopay.

That makes me worry that they're going to cut Liberapay off without warning. What's the level of effort required to switch to a new payment processor?

[Changaco]

That makes me worry that they're going to cut Liberapay off without warning.

It's more likely that they haven't reached a final decision yet.

The normal procedure for termination of the contract is to not renew it, and that means we would have until 2019-02-03 to migrate, because the contract is renewed yearly based on the date of the first transaction. Moreover Mangopay has to formally notify us of their intention not to renew the contract at least 3 months before the renewal date.

The contract does have a clause for early termination that Mangopay could use, by claiming that we have failed to fulfil our obligations, but that would be shady and very stupid.

What's the level of effort required to switch to a new payment processor?

Very high, higher than it was for Gratipay.

[mattbk]

Thanks, that was very helpful.

[trebmuh]

@Changaco still no news from Mangopay?

[Changaco]

Looks like your concern was justified @mattbk, they did cut off our access without warning, albeit for "technical" reasons.

[mattbk]

Sometimes I hate being right. Wish there was something I could contribute from here.

[tuxayo]

There this nothing really appropriate in the reactions one can put on a comment on GitHub. So here is a substitute:

[eldelacajita]

WTF 😮 😓

I hope @Changaco can figure it out with them in the short term. And then... let's think how we can work with him in getting rid of this "dependency" for good. If there is a way to do it, that is.

[jelv]

Damn, that is the bad scenario. Best of luck and let us know if we can help you in any way.

[tuxayo]

Is it useful to ask them in public to confirm that they indeed blocked Liberapay? https://twitter.com/tuxayo/status/1012020996025528325

[aggsol]

@tuxayo No, they will not talk in public about business with a specific customer.

[Changaco]

I have just received the termination letter from Mangopay, after having been silent for a month they have chosen to end the contract in 30 days!

(Edit: the letter is dated June 26th.)

[Changaco]

I'm wondering if we should run a modified payday to flush all funds from donors to recipients.

[trebmuh]

Does that mean that the users will have to withdraw their money within those 30 days?

What is the plan from your side @Changaco ? Switching to another payment processor? Interruption of service? Other?

[tuxayo]

@Changaco

I'm wondering if we should run a modified payday to flush all funds from donors to recipients.

I'm not sure that will be well perceived.

[Changaco]

@trebmuh I'm trying to figure it out…

I doubt that we can switch to another payment service provider within 30 days.

[trebmuh]

Yep', that is my fear behind this "30 days notice". I'm sending you my best energy @Changaco since I can't help much here. Let me know if there is something I can do.

[Changaco]

Extra note on the deadline: the letter says "30 days from the date on which the registered mail was sent", that means July 26th, exactly 4 weeks from today.

[Changaco]

Some stats: we currently have €97,176.75 and $18,310.73 in 2356 user accounts. That's a lot of money and people to deal with in only 4 weeks…

[mnh48]

I don't really know how to help in this case because I don't live in EU...

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offtopic: welp, at least the letter arrived faster...

I have had official letters that only arrived 7 days after it's sent (several times, not once) and it includes bank statements and some bills... because of the postmen are lazy somehow...

that kind of delay that would be disastrous if it happened to you as it means even shorter time to respond or even to do anything...

[trebmuh]

@Changaco : True. We need to keep communicating properly during this time.

I'm available until Sunday the 8th of July to help with this. Then, I'll not be able to keep up with it until the beginning of August (being on a street theater show tour). Unfortunate timing.

As usual, let me know what I can do to help you (here or on IRC).

[enricduran]

Hi @Changaco

Im founder of https://bankofthecommons.coop and Faircoop. We could study to integrate your service in our cooperative framework. We also have collaboration with fairbill.com who have a payment processor visa license. If interested, tell me, which way we can talk about it

[Zatalyz]

Thanks Enricduran for your proposal. We're gonna watch this.

We need time, that's the priority. We obviously need to change payment operators, but this cannot be done in 4 weeks. In article 10 of the Terms of Service, Mangopay states that a termination takes 2 months, so already making them respect this would be better.

I propose to contact the Quadrature du net, they have lawyers who may find a way to talk to Mangopay to save time. I need the letter scan for that. Changaco, maybe you can hide the names on the letter and put it here, where everyone can see it?

We must also communicate with our users. Let's write together on a pad : https://mypads.framapad.org/p/liberapay-jtbc77z1 . The goal is to write a post to put on the blog (and share it again), where to explain what is happening to people and what they can do. We must be transparent and avoid any misinterpretation in public communication. Redirecting towards a long and well constructed argument will be better than messages too short on mastodon/twitter, which may lead us to problematic simplifications.

I'm contacting some friendly librist organizations for more help.

[Changaco]

I'm not sure that publicly posting a copy of the letter would be appropriate, even if partially obfuscated.

I will send a copy to @Zatalyz and the other codirectors in private for now.

[tuxayo]

@albjeremias IMO that's a too huge step to not support at all fiat money (EUR, USD, etc) and support only cryptocurrencies. It's probable that Liberapay won't be sustainable like that. (to continue to fund it's development and to still be an option for the current projects using it).