DigitalRiver/MyCommerce stopped paying vendors since July
We're a small family company and the $20k MyCommerce owes us is a big deal.
For those who don't know MyCommerce is a platform for selling software online. They're merchant of record, they handle taxes, generate license keys, etc so they're a bit higher level than Stripe or PayPal. We're with them since 2005. Things started going south in August. July payment was due on August 15 but never came. Few days afterwards they sent and email that they're changing contract terms and that payments will now be sent 60 days instead of 15 days after the month. Sadly, I didn't switch to another payment processor immediately that day - accountants were on holiday, we were investigating our options, and we were generally happy for 20 years with them. We switched only in September, where they worsened contract terms even more, introducing monthly fee, hourly fee for support, increased payment thresholds, etc. By the time we switched, MyCommerce already sat on entire revenue from July, August, and half of September. Their support is not helpful.
This is not only about us, it's about myriad other vendors, mostly small ones. Unfortunately, we didn't have online space to share our findings and experiences. I only found today that it was discussed on kvraudio forum, and a bit on LinkedIn. There are many small vendors who are now in a hole for tens of thousands of dollars/euros.
It looks pretty much that MyCommerce / DigitarRiver Gmbh are in financial trouble. There are news of layoffs and new management. It's questionable whether we'll see any of our money and when. But the troubling part is MyCommerce still operates and takes orders. If there are vendors who still only know about what MyCommerce officially told them and wait for delayed payments - please reconsider your position.
https://www.kvraudio.com/forum/viewtopic.php?t=612462
https://www.kvraudio.com/forum/viewtopic.php?t=614929&start=30
https://www.linkedin.com/posts/lorant-barla_mycommerce-digitalriver-contracts-activity-7244193845607878657-iS4S/
Digital River emailed out of the blue a few months back saying we need to do new Know-Your-Customer paperwork. The forms are painful and I've had to resubmit a couple of times for minor mistakes - unsure if they'll ever actually accept it, and it seems to take a week or more for any response to a ticket.
Their new platform terms come into effect today, and they have absolutely buried the scale of their new monthly fee (US$100/month for me - unsure if it varies per customer). None of the emails mention the fee amounts. Customer support couldn't tell me the fee amounts. I checked the portal again today and the new contract finally has the new fees in it.
I setup a new merchant of record a few weeks ago, but that doesn't help the fact they're sitting on a few grand of my sales. My balance is above their new payout threshold (US$2500), but it wouldn't surprise me if they sit on the money and let the monthly fees eat into it until it's back below the threshold.
Thought I was doing the right thing by using a merchant of record to handle my international B2B sales since 2016. Apparently not. Fun times.
what we can do:
1 Ask customers if they agree to get refund&repay you to different merchant. Subtract 180 days from now for paypal orders (there is no deadline for CC? i could refund 1 year 2 months while testing) and start refunding orders after this date. We are losing ability to do this everyday, but we increase our refund rate by doing this so no hurry
2 Ask users w/ lawyers to fill class action lawsuit or at least to share their contacts/lawsuit+claim interest rate for unpaid amount https://www.kvraudio.com/forum/viewtopic.php?p=8979590#p8979...
3 subrogation: sell our accounts to lawyers
Same problem here,last payment was for May revenue. And other companies have Same problem
https://www.linkedin.com/posts/maja-te%C5%A1i%C4%87-8435509b...
+1 Exactly what we are experiencing ourselves but we made the mistake to wait till the beginning of October to switch: even if we didn't like the payment term changes, we had no reasons to suspect that we wouldn't receive any moneys at the end of September / beginning of October. They now owe us tens of thousands of dollars. And with the massive exodus, I do not have high hopes to get any of that money at all. We've been with this company since 2001 (previously called Element5 / Share-It!) without any problems. I can't understand or imagine what could have made them believe like this: as of today, they are still processing payments from end users! Hopefully, raising awareness on this issue will give us at least answers...
It's speculated on that audio forum that they took a big hit when Kaspersky sales were banned in the USA, as this was their perhaps biggest customer. Who would thought that such thing would affect many other vendors not related in any way to Kaspersky?
Still, their cut is around 5-10%, depending on how much they dip on the exchange rate. That means they hoarded 10-20x of their usual profits for July, August and September from all the other vendors. I sure hope that they didn't spent all that or moved it to a parent company. But the fact that we're not hearing any official statements suggests otherwise.
One person reported that "Contract library" is no longer visible for him in his MyCommerce account, and supported it with a screenshot. I suggest that we all download all documents that could be useful from their portal - contracts and sales/order reports for problematic months.
Edit: he clarified later that he's already in the process of cancellation and that's probably the reason he doesn't see contracts any more
I'm also affected. I'm considering suing them, but I am unsure if that makes sense. The German entity probably has no assets. Lawsuit would probably cost thousands of euros in legal fees, take a year, and it is unlikely there are any assets left to recover by the time the lawsuit is over.
They're also (or were, a couple of years ago) handling all Lenovo sales in Germany, so if it's true that would be a big deal.
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