Did Gumroad just get dumped by PayPal?

RN

Email received on Wed, 16 Oct 2024 22:11:34 (UTC)

In case the image above doesn't load, here's a transcript:

Important: Update Your Payout Method on Gumroad

Hello (...),
We wanted to inform you that PayPal has suspended Gumroad's use of their service.
As a result, we can no longer process payouts to PayPal accounts.

We've invested heavily in direct bank transfers for nearly every country. We encourage you to connect a bank account directly to your Gumroad account to ensure uninterrupted payouts.

To update your payout method:

1. Log in to your Gumroad account
2. Go to Settings > Payments
3. Choose "Bank Account" under "Payout method"
4. Enter your bank account details and submit

If you're based in a country where we don't yet support direct bank transfers (such as (...)), you can change your country to one where you have identity verification and a bank account. This will allow you to receive payouts through direct bank transfer.

We apologize for any inconvenience this may cause. Our team is working diligently to ensure smooth payouts for all our creators.

If you have any questions or need assistance, please don't hesitate to contact our support team.

Thank you for your understanding and continued support.
Best regards, The Gumroad Team

548 Market St, San Francisco, CA 94104-5401, USA

Powered by GUMROAD

zetheros

Gumroad had it coming. Always telling Paypal they were 'just on a business trip with colleagues', that they're just 'old friends' with credit cards. Glad Paypal has gotten it through their heads that Gumroad was just playing them, messing with their feelings and treating them no better than an IOU note or a Domino's coupon for a buy 1 free 1 personal sized pizza.

Hope Paypal can move on from this mess, godspeed

Zack Maxwell

This has me wondering if it's a good idea to drop my own assets from Gumroad. I've never made much from it anyway, and they're sure to make less now. But this paints Gumroad in a real suspicious light as well.
Anyone know why they were dropped by PayPal?

RN

Zack Maxwell said:

This has me wondering if it's a good idea to drop my own assets from Gumroad.

I was writing that "you probably should, just for the sake of it", but their website got a UX makeover and made things very confusing (and I personally find their UI not very pretty). Their homepage has no link to a help section anymore, it's now an infinite-scroll of their top selling stuff. You need to click the "Start Selling" button to get to their actual documentation: https://gumroad.com/about

They still have Stripe as an alternative payment option, and from that email it seems there's also a direct bank deposit option for some countries, which is probably ideal if your country is supported (mine isn't).

Note that they require you to have accumulated at least $10 in your balance before a payout happens, and for brand new accounts there's a 1 ~ 2 week verification period. And they might ask for tax information (personal info etc.), which some people have complained about.

...other than that, do it

ryonaln

Zack Maxwell said:

This has me wondering if it's a good idea to drop my own assets from Gumroad. I've never made much from it anyway, and they're sure to make less now. But this paints Gumroad in a real suspicious light as well.
Anyone know why they were dropped by PayPal?

My sincere advice is to give up on them, I have 2 gumroad accounts selling 2 different items, before they were removed by paypal, they locked my 2 accounts. I asked the reason and got no answer, the money in the account they said they would pay but they banned me from accessing to change payment method, so it can be considered that they stole my money )

RN

That's messed up, sorry to hear that. 

PolyHertz

Gumroad has never given me issues as a seller, but Paypal did back when I sold stuff through ebay. Never linked them as a result, but I am curious exactly why the two companies split ways.

Zack Maxwell

RN said:

Zack Maxwell said:

This has me wondering if it's a good idea to drop my own assets from Gumroad.

I was writing that "you probably should, just for the sake of it", but their website got a UX makeover and made things very confusing (and I personally find their UI not very pretty). Their homepage has no link to a help section anymore, it's now an infinite-scroll of their top selling stuff. You need to click the "Start Selling" button to get to their actual documentation: https://gumroad.com/about

They still have Stripe as an alternative payment option, and from that email it seems there's also a direct bank deposit option for some countries, which is probably ideal if your country is supported (mine isn't).

Note that they require you to have accumulated at least $10 in your balance before a payout happens, and for brand new accounts there's a 1 ~ 2 week verification period. And they might ask for tax information (personal info etc.), which some people have complained about.

...other than that, do it

I think you misunderstood. Or maybe I've misunderstood you.
I've had assets up on Gumroad for years, but it averages less than a tenth of the sales Artstation gets me and has higher royalties.
If I have to worry about them doing shady crap and potentially screwing me over somehow, it doesn't seem worth it.

RN

@Zack Maxwell I was definitely the one that misunderstood. I thought you wrote "drop my own assets ON Gumroad", as in, putting them up for sale heh
Interesting to know about Artstation store.

@PolyHertz I also don't know why it happened. Gumroad used to have some NSFW-friendly policies and then changed their stance on that (Reddit thread link), so now I have no guesses what the cause could be.

pior

Considering all this, what would be you guys recommendation for selling digital products today ? Not in the sense of a ecosystem/marketplace to pick (hence not talking about Unity store or the Unreal Marketplace/Fab or even Etsy), but rather, in the sense of running a basic (perhaps self-hosted) landing page + shopping cart + checkout system, for both digital and physical products.

I've been meaning to clone my own Unreal products onto a more agnostic online shopping solution for a little while now, and I am also preparing for the production of some digital products. I was just about to do it through Gumroad, but since Gumroad doesn't seem to provide any added value beyond it having a readymade UI and is now seemingly have problems with Paypal, is there any point to it really ? Isn't it possible to skip the middle man altogether and setup a store directly tied to Paypal ? Or is Shopify (or an equivalent E-commerce platform) needed ? And why ?
I'll be inquiring this with a local web agency shortly, but I'd love to hear your thoughts.

(BTW the news in the OP is worded in a way that makes it sound as if the breakup is affecting payouts only ; but Paypal has also been seemingly removed as a paiment option for customers, with only card and Google Pay remaining - at least based on what I see ATM).

RN

@pior other than the time taken setting things up, which is probably mitigated by having all the presentation material (text, images, videos) ready to be copy-pasted, and only for those stores whose terms of use allow it of course, I see no reason not to use all of them at once. So Cubebrush, ArtStation, Unreal marketplace, Gumroad, an e-commerce platform on a personal website and so on. Whatever ways the potential customers prefer to use, you've got it. It's everywhere.
I'm looking forward to others' opinions.

PS I sent an email to "support at gumroad dot com" asking about some stuff related to Stripe, and a few seconds later they auto-replied with some more info that should answer @PolyHertz 's question about why the breakup happened.
Image below:

Transcript in case the image doesn't load:

Hey,

Very sorry for not giving you the heads up on this sooner!

We've removed PayPal as a payment option to lower technical complexity prior to open sourcing Gumroad and to mitigate fraud. But if creator revenue is impacted, we will restore PayPal as a payment option.

In the meantime, active memberships that are renewed using PayPal will not be affected. Your customers can also still purchase using credit cards or Apple/Google Pay.

Let me know if you have any questions or feedback on these changes!

Best,
Jayson

Nixellion

I've also sent them a few emails about this, asking for clarification. It's been over a week and all I got was this same automated reply, which seems very detached from reality. Their ignorance is frustrating. They seem to be focused on creator revenue so much that they completely overlooked or forgot about the fact that many creators rely on PayPal for actually receiving and withdrawing their earnings. Direct Transfers and Stripe only support around 50 countries. PayPal supports over 200. So they are cutting off over 150 countries from being able to withdraw their earnings. Yikes. 

And wait, there's more. On the Payouts page they recommend to change payout option to Direct Transfers to a country they support, or "any country you have an ID and bank account in". Well, that's not enough, as ideally you should also open a business entity and do all the extra accounting work, taxes and all that. Potentially hire an accountant, because that can be a lot of work.

So in the short term they may not see any significant drop in creators' revenue (and Gumroad's own income), but I expect that many creators will be moving away from Gumroad completely in the coming months, as they find alternatives.