I must be missing something. Who the hell are Digital River ? What do they make/do ? Why should I care ?
Digital River runs dry, hasn't paid developers for sales since July
Digital River has not paid numerous merchants since midsummer for software and digital products they sold through its MyCommerce platform. The biz is a decades-old US-based e-commerce provider that's used by, among others, a ton of software developers to sell their programs online. It handles their online payments, and claims …
COMMENTS
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Thursday 17th October 2024 00:31 GMT TonyB
I'm one of hundreds who would remember DR from the late 1990s early 2000s Shareware Industry Conferences. Initially they were one of a dozen or so payment processors who would rock up at the conference offering generous hospitality to us delegates - virtually every meal was sponsored by one or other of them; the DR Saturday evening entertainment spectacular outdid everyone else. All the others would vow that they were going to stay independent so as to be able to give better service to us little guys, but one by one the DR seven-digit cheques talked. Now I can't even remember the names of all those who were swallowed up saved for SWREG who I used for many years before switching to BlueSnap, but I do remember the wonderful food.
How can you lose money doing this? You collect the payment, deduct your percentage (~7% in my case IIRC) and pass the net on at the end of the month. If the unremitted balances weren't held in a trust account, then they should have been.
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Monday 4th November 2024 16:21 GMT Twilight
By accounts that I've been reading, they are essentially operating like a Ponzi scheme and not keeping enough cash. Essentially they are relying on sales of following months to pay the vendors for previous months. Kaspersky (now banned in the US) used DR for payment processing - there is an unverified theory that Kaspersky may have been a VERY significant portion of DR income so losing those ongoing sales means they can't pay vendors.
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Tuesday 15th October 2024 21:53 GMT Giles C
I have in years gone by I bought quite a lot of software through them, you used to get the student editions of Autocad, as Katrina says Parallels (vm software for macs) and quite a few others I have probably forgotten about.
To say the developers who rely on them for their income aren’t creditors is a bit strange, especially as it is a low risk business. Essentially dev pays you a fee to handle sales, a sale is made and you send a license key to the end user, then send the money to the dev less your fees.
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Wednesday 16th October 2024 05:55 GMT drankinatty
It looks worse. The Mintz & Gold firm involvement and the "sucks to be you" weasel-worded letter appears to be a classic delay-while-the-owners-sweep-the-accounts situation. All with plausible-deniability, "we didn't know Digital River was doing that, we were just hired to handle customer invoices..." Spend a few dollars on a law firm on the front-end, leave by the back-door with the spoils. By the time the class-action unwinds the chain of events, the company is denuded and an empty-shell unless they move quickly and file for relief to sequester the accounts. Call me skeptical.
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Wednesday 16th October 2024 13:52 GMT CrazyOldCatMan
The Mintz & Gold firm involvement
I'd be very loath to use a law firm that didn't actually realise that a contract is between two parities and isn't valid if both sides haven't agreed to it.. So plonking a new contract in place and basically saying "we signed it for you" is. pretty much illegal.
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Monday 4th November 2024 16:26 GMT Twilight
Ah but it isn't a contract - it is a service agreement (that just happens to look exactly like a contract (albeit probably pretty one-sided)). Companies in the US (and possibly elsewhere) have been massively pushing the bounds of what is legal for a couple decades now. The bigger ones, at least, seem to just figure that they may have to, at worst, pay some fines if what they've been doing is determined to be illegal.
It often seems like the US is trying hard to turn itself into a cyberpunk corporate dystopia. Although none of the authors I've read seemed to predict exactly the shape it is actually going (Neil Stephenson in Snow Crash seemed to come closest).
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Wednesday 16th October 2024 15:54 GMT bombastic bob
Re: It's a delaying tactic
The NYC tort system (and criminal justice system for that matter) has OBVIOUS GROSS and EGREGIOUS FLAWS and INJUSTICES within it, even OUTRIGHT CORRUPTION. Good luck to anyone slugging things out within THAT system... YEARS from now attorneys will burn through whatever settlement you MIGHT have gotten. [it has been ON PARADE *ALL* *YEAR* after all]
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Wednesday 16th October 2024 08:06 GMT simonlb
Just checked my old emails - Avast AV renewals and an online NVIDIA GPU purchase from a few years ago.
Wouldn't have thought their business model was so precarious, but it sounds like someones been fiddling to extract a lot of the liquid capital from the company. Unless they were taken over by a private equity company a couple of years ago and I missed it, as that is the standard operating model once that happens.
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Thursday 17th October 2024 04:39 GMT AB 1
Small software companies like mine don't want to deal with all the hassles of international tax, shopping carts, credit card processing etc. So we pay a third party to do that, they then pay us the money minus a fee.
Digital River was such a third party payment processor. They were one of the larger players, due to buying up lots of other companies. However they have had a terrible reputation for shady practises since I can remember.
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Thursday 17th October 2024 12:53 GMT Always Right Mostly
We just learned about this as a DR customer for decades from this article. They refused to put anything in writing only phone call. We yanked them off our site and are working out alternatives.
Would you mind sharing who you switched to? Most of the alternatives are waaaay to complex for a small biz...on IIS website at that.
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Tuesday 15th October 2024 22:38 GMT Michael Hoffmann
Pity
Like others I went through my purchase history and they come up a lot for some very useful "fringe" tools, especially for conversion - of just about anything to anything. For then the freely available ones just didn't do their job.
My first purchase was 1999 and my most recent 2020. Good gods...
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Wednesday 16th October 2024 07:43 GMT Grunchy
Krazy Krazy
We used to have Krazy Krazy store here in Western Canada, who went bankrupt (of course), but even up until the night before they locked the doors they were going hard to sign up layaway purchases.
So you go to Krazy Krazy to buy a VCR and they have one you want, but you can’t afford it right now, so the salesman guarantees to keep one for you if you start up a layaway purchase agreement, in which you leave them some money, and keep going back and pay a little at a time, until the whole purchase price is paid, and then you get the VCR (if they still had one).
Except if they go bankrupt, at which point you’re just another unsecured creditor who is never gettin’ anything.
https://en.m.wikipedia.org/wiki/Krazy_Krazy
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Wednesday 16th October 2024 08:04 GMT Androgynous Cupboard
Aha.
There are a few vendors of software tools use daily that use Digital River, but I think that should be "used Digital River" - they emailed me last week telling me some subscriptions were cancelled, but the vendors says otherwise so I guess it's just Digital River being removed from the picture.
It's difficult to understand how a firm that simply enables sales and takes a cut can go bankrupt, or why they need international subsidiaries. I suspect the answer to those two questions is related.
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Wednesday 23rd October 2024 16:07 GMT I could be a dog really
Re: Aha.
I suspect it goes along the lines of :
Sound company taken over by vultures. Vultures then (because they now have a controlling say in how it's run) have the business borrow lots of money from another of their ventures at silly interest rates. Over time, the other business gets it's money back (in cash terms) thanks to the high interest rates - but the victim business still has a massive debt because a lot of what they've paid has been just the interest. Victim business eventually runs out of cash due to the cost of servicing the debt and goes under. Vulture then steps in and (using preferential terms as a secured creditor, which was part of the loan agreement) takes the entirety of what's left and leaves unsecured creditors with nothing. Result, champagne all round for the vultures, pain and misery for anyone else - especially the staff and small businesses that use used the service. In this case, finding excuses not to pay the small developers for a few months while still selling software merely increases the amount of cash in the bank that the vultures can take.
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Wednesday 16th October 2024 08:20 GMT icarmon
One of the affected vendors here, they refuse to pay without any reasonable reason just excuses, after working with them for more than 20 years I never thought this may happen. We've moved to another MOR and stopped sending using Mycommerce platform and of course we'll never return to Digital River.
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Wednesday 16th October 2024 08:21 GMT alexcayman
Approximate size of potential DR fraud is USD360M
Not so many of people did the calculation - while DR normal business model is get 5% of overall sales, and it resulted in ~6M/month, freezing payouts for 3 months means that they collected 60x os this value, around 360M of USD. The actual amount can be less, since people started to leave the platform, and some did refunds to customers (which still work, as well as "sales").
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Wednesday 16th October 2024 11:05 GMT Richard 12
Re: Approximate size of potential DR fraud is USD360M
If refunds still work, perhaps tell DR to refund everyone where Digital River have unlawfully withheld payment.
You're almost certainly never going to see that $300M+ lost money, but if DR have to refund the customer then at least they may not run away with all the money.
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Wednesday 16th October 2024 23:12 GMT PRR
In 2022, I ordered DRAM from "Crucial", as I have done for 20 years. THIS time the transaction went through Digital River.
20 years ago DR was a fine operation. Handled a lot of shareware and small hardware. Didn't hear complaints (I was sysop on a Compu$serve forum which would have attracted gripes). Even in 2009 when I ordered a copy of Win7 from Microsoft, DR fulfilled it fine.
But the 2022 deal was not going through. Seemed to be stalled at DR. I had not expected DR to be involved and had had fine past experience, but this was different. Google turned up dozens of recent non-fulfillment complaints. After a week, I *called* to cancel the order (took two weeks but they did it) and ordered from another marketer. Hah, my DRAM shipped an hour later! But my 2nd source was even faster; anyway I thought DR was pretty scummy, shipping RIGHT after cancellation. Did get a refund.
The #4 PC here needs a new SSD ASAP but I did not order from Crucial. Lost my 25 year confidence.
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Wednesday 23rd October 2024 16:11 GMT I could be a dog really
Re: Vendors who chose Digital River should assume its responsibility
Yes, a bit sucky. But, depending on the amount, the customer could go to their bank for a refund, which the bank will take from DR - note, take from*, not ask for.
* I assume it's not changed, but years ago when I was in retail, to take cards we had to sign an agreement that basically gave the bank the right to take any reversed transactions directly from our bank account.
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Friday 25th October 2024 09:38 GMT Digital Coward
RE: Vendors who chose Digital River should assume its responsibility
This morning I got an email from a software vendor (I'm putting their name here, because they are very small and totally honourable).
They sent an email basically saying "We have been screwed by Digital river and we are refunding your card, could you possibly pay us again with a fat discount for your time and trouble"
The payment was for updates to an existing product hence it has sort of turned into a sort of "Nagware" as of this morning.
I checked the bank and there was no payment. Then I checked the document I was sent by Digital river and actually no card refund is mentioned .. it just says "credit memo"
Is it possible that Digital River has moved to a new phase?
As far as my software supplier is concerned I will pay them regardless, they are two guys who make a superb product and are always on the end of the phone if there is trouble ?
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Monday 4th November 2024 16:36 GMT Twilight
Not just digital products
Digital River does (or at least used to) have a decent sized warehouse and handled fulfillment of physical products (largely computer-related) as well as digital-only products. I wonder if they still do the physical fulfillment the same way and if those vendors are at least getting their physical merchandise back? My detailed knowledge of them is quite old (I consulted for them in the late 90s and my wife consulted for them in the 00s) so I'm not sure if they kept up the warehouse in the last decade (possibly they shut down direct physical fulfillment with the VC buyout in 2015).
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Tuesday 28th January 2025 03:54 GMT Anonymous Coward
micron / Crucial - cannot order due 3rd party payment partner ?
got an email re cannot order due 3rd party payment partner from
crucialnews@email.crucial.com
is there a known continuing problem with
Digital River
( Digital River delays sales payments to vendors since July
)
Or have they got another processor in place
Since when I long ago ordered from them and it is a different problem?
( Future support is my concern for consumer drives. I know about the patent
accusations and accusations of price-fixing by large suppliers of memory for SSDs .. )