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PsyStar saga Day 3: Mac clone maker, payment processor trade charges

The company, changing address yet again, says middleman dropped the ball

April 17, 2008 12:00 PM ET

Computerworld - The Miami company that claims it's selling Mac clones said today that it will take payment only via PayPal because its credit-card processor "dropped the ball." That processor, PowerPay Inc., has disputed the charge and said it cut PsyStar Corp. loose because the company violated the terms of their agreement.

In one of the first extended comments PsyStar has given this week by telephone, it said PowerPay's only stated reason for closing its account was that it had exceeded its transaction allowance.

Thursday morning, the beleaguered PsyStar tried to explain why it is now accepting payment only via PayPal for its Open Computer clone. "Midday yesterday, our store was not receiving any orders," the company said in a statement on its Web site. "This was due to the fact that our merchant gateway, PowerPay, dropped the ball on us and refused to process any more transactions from our company."

PsyStar added that it is using PayPal, which is typically offered as a payment option by small electronic retailers and online auction sellers, until it could find another card processor. "Apparently, PowerPay was not ready to handle the community's demand for Open Computing," PsyStar charged.

According to a report on, however, PowerPay said it had dropped PsyStar, not the ball.

The story quoted Maria Luisa De Luca, PowerPay's director of risk management, as saying that her company pulled the plug on PsyStar because the Florida firm had violated the terms of its agreement. "There are plenty of reasons why we shut the account off. We did not know that's what he was selling, we learned that yesterday," De Luca told De Luca did not immediately return Computerworld's calls Thursday morning.

PsyStar, however, answered the phone. When asked to comment on PowerPay's denial of its "dropping the ball" charge, a woman who would only identify herself as "Maria" at first said, "We won't be commenting on that or on a lot of things."

After a short hold, however, Maria came back on the line and said that PsyStar had been told only that it had jumped the transaction allowance when PowerPay pulled the plug.

"Yes, we did violate the agreement, we exceeded the [transaction] limits of our account," Maria said. "We exceeded in one day what we were supposed to have for the entire year."

PowerPay did not offer to increase the limit, she said. "We have attorneys on this," Maria said.

Apparently, transaction volume had another part to play in the drama, however. "They said they closed our account to investigate claims of fraud," Maria continued, "but it was all about us going to exceed our limit. That's why they closed our account."

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