In the open source world, “software bounties” are a familiar concept — money is raised for a developer to implement a new feature, write documentation, or create a new piece of software. Since it launched last August, Christchurch, New Zealand-based microPledge has been providing a free platform for the management and collection of software bounties for open source software projects. But unless they can raise enough money to make a significant change to their payment system, they might have to shut down.
microPledge, which has just about $30,000 in pledged software bounties across over 280 projects from over 1,200 users, has been utilizing PayPal for payment processing since it launched. Founder Berwyn Hoyt told me that PayPal recently contacted them to let them know that holding money in trust to be distributed later, as they were doing, is against PayPal’s terms of service agreement. Hoyt says that when they started the service, he and co-founder Bryan Hoyt accidentally overlooked that part of the TOS. Ironically, it was microPledge that accidentally tipped PayPal off to what they were doing when they reported pledges made to their system from stolen credit cards.
As a result, PayPal has frozen microPledge’s account — including everyone’s pledged money — pending an official review, and microPledge is left for the time being without a payment processing solution. Hoyt tells me that they’re currently evaluating alternative options, but finding a payment processor that would allow microPledge to take money and hold it in escrow has proved difficult.
The switch over also won’t come cheap. When it launched, the assumption was that microPledge would make money by taking a cut of bounties from projects being developed under closed source or proprietary licenses (the site is free for open source projects). Unfortunately, that hasn’t been the case, and the site has never been profitable. Keeping it open has become a labor of love.
In order to fund the development of an alternative payment solution, microPledge is “eating their own dogfood,” so-to-speak, and asking for users to pledge $4,000 to help keep the site open. So far, $515 has been raised, and users won’t be asked to pay until after the goal is met and the new solution has been implemented (which is, after all, the only way those who donate could actually remit the payment).
If the $4,000 goal isn’t met, Hoyt says they may sadly be forced to close the site. Over the next few weeks, microPledge plans to refund everyone’s money regardless of the status of the funds in their frozen PayPal account, even though that likely means paying out of pocket and operating at a loss.
microPledge is a useful service for the open source community, and we’d hate to see it go under because it can get its payment issues sorted.
Josh Catone joined Mashable in May 2009 and is Executive Director of Editorial Projects. Before joining Mashable, Josh was the Lead Writer at ReadWriteWeb, the Lead Blogger at SitePoint, and the Community Evangelist at DandyID.