Over the course of the last year, PayPal has steadily changed their fee structures for our mass payments. This has led to a steady decline of reserves that are required for us to properly process cashouts. As we started looking at the fees and the scale of the highest impact, we decided to make some changes to how cashouts are processed.
Effective immediately, we have made the following changes:
- Small transactions of $5 are not sustainable. These are the actual highest fee hitters because of the percentage. It makes more sense for our residents to cash out bigger amounts as the sliding percentage works out better for them, so we've increased the minimum cashout amount to $50 USD.
- Percentage change of I'z converted. It was originally 550 for the conversion, it is now 575I'z to convert. This helps take the sting from the fees that they have recalculated on our account.
- Those who take money from our residents as Money Tree options, to cash out, will no longer be allowed to do so. Any account that attempts to cash out I'z bought by our residents and freely given to users via money trees, will be returned their I'z. We've tinkered with this in the past when we saw heavy abuse of the money trees, and feel this is a necessary step to take.
For those wondering, part of the fee structure change is that while we are very diligent in fraud, we are considered an industry that rates high in fraud, and as such, those fees do come back to bite us once in a while. For example (just so people understand how this works):
Credit Card Fraud Person A steals credit card information (or most likely purchases it), then comes to InWorldz and purchases currency. We do not know this immediately, until we see multiple purchases come through, and sometimes they create alt accounts to do this and spread the transactions across avatars. One of two things happens at this point: Either we notice the multiple transactions and start an investigation, or they keep the transactions spread out over time as in one transaction per day over a week. The latter tends to work better as we have customers who are legit buyers who do this themselves. Then the cashout point comes. They take the monies and cashout. Typically I will verify all cashouts myself every Tuesday and Friday. Any new emails, and I suspect the account. If I see they've made purchases on the account, I will usually pass it through. However, if they've amassed enough I'z they can continue to cashout with making nominal purchases throughout the grid. When that happens, and the victim of the theft realizes it, they put in a call to halt the purchases. We refund the money, but we also can be hit with up to a $50 fee for the fraudulent transactions, per transaction.
Yes, InWorldz must pay for the processor putting through a transaction on a fraudulent credit card that we had no hand in. This is a fee that started about a year ago and I remember being stunned that PayPal decided to tell me about it when I made my last announcement about Fraud.
One thing should be noted as I discussed with people in discord about the changes: If for some reason we have a user who has invested but has to leave or dies, or some other reason, we can make exceptions for those situations. We understand that walking away from a few dollars is one thing, walking away from $49 is a whole different story. So they can contact us and we'll investigate the account to ensure no fraud, and handle the situation.
I know these are pretty some big changes, and I apologize as we didn't want to put anything out in front of making the changes. For our large creators and landlords, it will take some adjustment to their pricing, and for our smaller residents, we realize it means you'll have to hold your I'z a bit longer, however, instead of just not doing cashouts, we felt this was a much better step and will continue to monitor the situation to ensure these fixes are working.