News
Digital River has no longer paid a huge form of merchants since midsummer for tool and digital products they sold thru its MyCommerce platform.
“After over 20 years of partnership with Digital River, Traction Software Ltd has been left feeling as though we’ve been ‘rug pulled,'” Lee Midgley, managing director of Traction Application, told The Register. “For the previous three months, we’ve skilled a complete terminate in tool sales revenue funds without a fortify, no affirm contact, and most attention-grabbing additional terms and stipulations designed to delay resolution and extract more money from us.
“Astonishingly, Digital River continued to take sales from our loyal customers until we removed them from the order system. It now appears they have no intention of making payments and may be entering a liquidation process under a new CEO who has been involved in similar situations before.”
The brand new CEO, Barry Kasoff, was as soon as first famed on the e-commerce biz web space in August. Kasoff is additionally listed because the president of Realization Products and services, “a full-service strategic consulting firm specializing in turnaround management and value enhancement…”
The privately-owned, Minnesota-basically based alternate appears to own laid off a considerable form of workers, presumably the consequence of what its UK subsidiary describes as cost reduction initiatives utilized in leisurely 2022.
Digital River, Inc, owned by father or mother Contemporary York-basically based Danube Non-public Holdings II, LLC, has a few subsidiaries in conjunction with Digital River GmbH, Digital River Ireland Ltd, and Digital River UK Miniature. The corporate didn’t acknowledge to a attach a query to for comment.
A December 29, 2023 financial submitting [PDF] for the UK subsidiary contains an audit notify from UK chartered accountancy Durrants that calls out skill financial issues that threaten the e-commerce provider’s ongoing viability as a alternate. “The Company is dependent on the ongoing liquidity of the parent company, Digital River, Inc, which is experiencing negative financial trends, potential covenant breaches, and liquidity issues. It also holds significant external debt, which has been refinanced and extended on a number of occasions.”
Digital River’s financial danger has evidently affected its willingness or skill to pay customers. Accounts of withheld funds abound in on-line forums, on social media web sites, and evaluate web sites.
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On September 16, 2024, Digital River sent an electronic mail to customers informing them of “upcoming changes to our Master Services Agreement, effective October 16, 2024, for MyCommerce.”
The brand new agreement for Digital River GmbH adds a MyCommerce Platform Rate, reduces the chargeback payment from $25 to $20 per chargeback, adds a minimal payment threshold of $2,500 or $10,000 for wire transfers outside the Single Euro Funds Blueprint, and creates a Tier 2 Consumer Give a boost to offering for $185 per hour.
In a put up to LinkedIn three weeks ago, Lorant Barla, CEO of Romania-basically based Softland, said, “Digital River is automatically ‘pre-signing’ contracts in your MyCommerce account without your approval. The new MSAs [Master Services Agreements] stipulate additional platform fees and payments delayed for up to 60 days (we are still waiting for the payment from July).”
“Our company, Softland, is not affected,” Barla told The Register. “We primitive MyCommerce (Digital River’s service) as a secondary payment processor to contend with sporadic funds from German customers. We stopped the expend of their services on August 15, without delay after they didn’t ship the cost for July.
“The platform fees they intend to introduce in two days, the NET 60 payments, were all reasons to quit using their services. The competition has no platform fees and they pay in 15-20 days.”
Barla expressed skepticism that Digital River will meet its obligations.
“I don’t think they will pay, they did not respect their own contractual payment terms, they delayed answering the support tickets opened by the affected vendors and they lost all credibility,” he said
Barla posted a image of his firm’s MyCommerce control panel, noting that Softland’s contract library contains an MSA dated October 16, 2024
“The first date is obviously in the future, so no way it was signed by us,” he said. “No one in our company remembers signing the other two agreements. It is fishy that the hour is exactly 12:00:00 AM on all (like who in their right mind enters into agreements in the middle of the night).”
A response from Digital River’s LinkedIn memoir says the digital commerce provider has the merely to update its agreements.
“We understand your unease regarding the automatic ‘pre-signing’ of new contracts in your MyCommerce account and the stipulations of additional platform fees and delayed payments,” the put up says. “We assure you that our actions are guided by the terms outlined in our Master Service Agreement (MSA). Per our MSA, we reserve the right to update the agreement as needed to reflect changes in our services, regulations, or financial considerations.”
One of many vendors who has been asking to be paid showed The Register a show masks bought from Digital River’s regulation firm, Contemporary York-basically based Mintz & Gold, in response to payment inquiries.
The regulation firm says that Digital River at the moment doesn’t steal into consideration service provider debt claims to be proper obligations. The show masks reads, “I am writing on behalf of my law firm’s client, Digital River, regarding the inquiry you submitted to Digital River’s Solution Center. We are in the process of validating invoices and claim amounts from MyCommerce publishers. Digital River intends to reach out to MyCommerce publishers … in the near future concerning processing invoices per contract terms. In the interim, please know that Digital River disputes the claimed debt.”
Digital River’s attorneys from Mintz & Gold didn’t acknowledge to a attach a query to for comment.
Affected vendors are at the moment seeking to role up a category motion lawsuit in opposition to Digital River. ®
Editor’s show masks: This yarn was as soon as up to date put up-e-newsletter with comments from Lorant Barla.