Kagi, the company used for online ordering, declared bankruptcy as of last week (sometime the week of 8/8/16). Apparently, they shut down their servers without giving notice to their developer clients.

Maintain - Cocktail - provided notice to their customer base today, 8/15/16; and, it's how I heard about it.

Maintain advised they've switched their sales to either PayPro or eSellerate. ...I don't know much about those two payment companies. Any comments?

Never heard of this Kagi company. (But what else is new?)
What is the import of its bankruptcy — ie, why should anyone care?

I have used Kagi as an intermediary in paying Maintain for Cocktail. I never had a problem with them. I received the same email the pgGuy got, and the problem for Maintain and other developers is that they lost about two months of revenue which will never be paid to them. Also, customers who need to get a refund will have to use PayPal. I had not heard of the other two, but you can visit PayPro and eSellerate

I am extremely wary of such third-party money movers — ie, I don't trust the "security" of any such provider (given the general history of same). What makes these entities viable (and 100% protected)?

I, too, am wary. I use PayPal when I have no other choice but I do not let PayPal have access to my bank account. Instead, they pay via a credit card. I can easily dispute a credit card purchase, although PayPal claims that they guarantee satisfaction.

Exactly! / Exactement! / ¡Exactamente! / Ganz recht!

I am similar except PayPal is always my first choice, and my rationale is simple. Over a period of years I have never had reason to be concerned about PayPal and I like the idea that they process charges to my credit card without the seller getting the credit card number.

For example, if I made 10 purchases without PayPal my credit card number would be sitting on 10 different servers…each with levels degrees of security. With PayPal it's 10 purchases on one server, and I believe they are careful with the stored data.

…which, of course, made victims of Cocktail and others, "...the bankruptcy has also left about thousand of developers like us in the lurch, without any of the money for the last two months worth of sales."

I use PayPal with any vendor that accepts it, and, as a matter of fact, I've paid a buck or two more on occasion just to be able to use PayPal.

But I thought you had to link a bank account to your PayPal account, or is that only because I'm a seller?

I was involved in one PayPal unhappy customer incident, and they took care of it so satisfactorily that they made me unhappy. (Don't ask!)

I think that used to be a given, but other than Amazon (which we discussed a while back), no entity with which I do business (that doesn't accept PayPal) retains my card number after the transaction has ended (Oops! One...Apple.), and from what I've seen, that practice has been spreading, although as time passes, more and more entities are accepting PayPal, under pressure from their customers, I presume.

PayPal is becoming/has become ubiquitous, and for good reason!

I can't say anything about sellers because I have only used PayPal as a buyer, but you don't have to link your bank account. I did when I first established an account with PayPal but I deleted that link and now only use a credit card.

If this has credence, then Kagi was/is a victim of a fraud. Sadly, Maintain and others got included in the fall out.

No doubt, this will play out in the courts for months/years, and more claims and counter-claims & law suits will follow.

Thinking about it, I need to have a bank account linked to my PayPal account so I can move my sales proceeds, so to protect myself I never keep more than a minimal amount of money, i.e. what I need to cover my outstanding checks, in my account.

Alternatively, I could leave my sales proceeds with PayPal and work with the balance, but I prefer not to work that way, and it would be non-interest-bearing money while my bank pays me a munificent 3/100ths of 1% interest.

Kagi was a payment processor that was started more than two decades ago, before PayPal was a thing, before most people could get credit card merchant accounts of their own. They allowed software developers to take money for shareware programs instantly; they handled the credit card transaction and they sent registration codes to the buyers. Without them, shareware might never have caught on.

They went bankrupt because they ended up taking a problematic client that committed fraud on a massive scale, costing Kagi hundreds of thousands of dollars.

A lot of small developers are now left scrambling trying to figure out how to sell registered versions of their software. PayPal lets them take money, but that's all it does. Kagi handled the servers and software that automatically sent registration codes to users as soon as they paid for the software; now, that's something that developers must do by hand.

Merci for the details.