We need alternatives to Paypal

[Mike Lorrey]

News this week exposed that Paypal attempted to implement an anti-free-speech policy that would charge paypal users $2,500.00 if Paypal finds they engaged in "spreading misinformation". This is a highly problematic policy. While it is fortunate that paypal founders, including Elon Musk, immediately dragged Paypal for this policy, causing them to walk it back with claims that the policy was "published in error" (were they intending to keep it secret?) and that they would not implement the policy, which has since been removed from their website.

I ham HIGHLY concerned about Kitely relying on Paypal as the sole payments gateway for users and request that Kitely implement alternative payment methods. If Paypal re-implements a similar policy in the future I will cancel my Paypal service. If Kitely fails to implement an alternative payments method, I will have to cease being a Kitely customer when Paypal begins again implementing anti-speech policies.

[Zyzzyx Qinan]

Hi Mike,

We are also worried about giving companies the right to "fine" you money for legal activities they don't like. Fines extending beyond freezing money passing through their system should remain in the sole discretion of the legal system (and even that should be done within the confines of what the law allows). That said, while I'm not a lawyer, I highly doubt any attempt by PayPal to enforce such a fine would pass legal scrutiny. The only likely result IMO would be a class action suite levied against them for trying to charge people for a "fining service" they were forced to accept to be able to continue billing their customers.

[Mike Lorrey]

Hi Mike,

We are also worried about giving companies the right to "fine" you money for legal activities they don't like. Fines extending beyond freezing money passing through their system should remain in the sole discretion of the legal system (and even that should be done within the confines of what the law allows). That said, while I'm not a lawyer, I highly doubt any attempt by PayPal to enforce such a fine would pass legal scrutiny. The only likely result IMO would be a class action suite levied against them for trying to charge people for a "fining service" they were forced to accept to be able to continue billing their customers.

Class actions take years and years to go through the legal process. My class action against Linden Lab took four years before they settled. IMHO this is a bit too long for Kitely to rely upon the legal system.

[Zyzzyx Qinan]

Hi - I also am very concerned about PayPal. Kitely is the only service I pay with PayPal and I no longer want PayPal linked to my bank account, I really hope you consider finding an alternative payment method.

[Christine Nyn]

Whatever your feelings are about what PayPal tried to do with their TOS change they've quickly reacted to the backlash and AFAIk have promptly backtracked on that TOS change. If they try to get such language included in their TOS again then you can react to it at that time. Even then I'd personally wait to see if they try to actually enforce that clause against anyone.

I find it extremely unlikely that any CEO would even seriously consider activating such a clause against one of their customers considering the irreparable harm that would do to their business, even before considering any legal ramifications this will have for them down the line. I don't know of any company that has tried to charge anyone's third-party bank or credit card account for a TOS violation without a court ruling. The worst I've seen financial institutions try to do is to freeze the money you hold with them while suspending your account pending legal proceedings.

Again, I am not a lawyer but our business uses PayPal exclusively, it has a higher exposure than you do given that we host user-generated content, and I am apparently less concerned about this TOS change (that was undone) than you are. Not because it is something I agree that PayPal should be able to do but rather because I very much doubt that they would ever attempt to try to enforce that clause against anyone who isn't universally hated by their entire user base. Anything less than that and they'd suffer financial damages from bad PR, lost business and governmental scrutiny far exceeding whatever they could hope to gain from charging the people they "fine". It would be a very bad business decision for them even if they were on solid legal ground to do so and I don't think any such clause in a modified Standard Form contract would be found legal by any half-competent court.

[Christine Nyn]

It came up in another forum (not Kitely) that Paypal have just updated their prohibited activities policy:

3 (e) by payment processors to collect
payments on behalf of merchants, (f) are associated with the sale of traveler's
checks or money orders, (g) involve currency exchanges or check cashing
businesses

Details at https://www.paypalobjects.com/marketing ... 110322.pdf

Would this in any way influence how Kitely conducts their business with Paypal?

[Christine Nyn]

Hi Christine,

Please point me to the relevant part of the updated section of the agreement on the PayPal site itself (www.paypal.com). I have no idea what PayPal services are referred to by the pdf you linked to or whether paypalobjects.com represents PayPal or some other entity.

[Mike Lorrey]

Whatever your feelings are about what PayPal tried to do with their TOS change they've quickly reacted to the backlash and AFAIk have promptly backtracked on that TOS change. If they try to get such language included in their TOS again then you can react to it at that time. Even then I'd personally wait to see if they try to actually enforce that clause against anyone.

I find it extremely unlikely that any CEO would even seriously consider activating such a clause against one of their customers considering the irreparable harm that would do to their business, even before considering any legal ramifications this will have for them down the line. I don't know of any company that has tried to charge anyone's third-party bank or credit card account for a TOS violation without a court ruling. The worst I've seen financial institutions try to do is to freeze the money you hold with them while suspending your account pending legal proceedings.

Again, I am not a lawyer but our business uses PayPal exclusively, it has a higher exposure than you do given that we host user-generated content, and I am apparently less concerned about this TOS change (that was undone) than you are. Not because it is something I agree that PayPal should be able to do but rather because I very much doubt that they would ever attempt to try to enforce that clause against anyone who isn't universally hated by their entire user base. Anything less than that and they'd suffer financial damages from bad PR, lost business and governmental scrutiny far exceeding whatever they could hope to gain from charging the people they "fine". It would be a very bad business decision for them even if they were on solid legal ground to do so and I don't think any such clause in a modified Standard Form contract would be found legal by any half-competent court.

Ilan, you are maybe not fully aware of how insane corporate America is moving these days, with huge wealth managers like Blackrock forcing all companies they hold stock in to adopt ESG policies that include rules for employees and customers against speech that dissents from the political agenda of ESG. Banks are also coming under similar pressure from leftists in Congress via the Federal Reserve to act similarly. "Get woke, go broke" is how things go, but the C-suites don't really get the message, they try to figure out new ways to implement this political correctness and an American version of China's social credit system.
I have up to now been mostly satisfied with Paypal (other than that one time they interfered with my business interacting with an investor), so I am not being this cautious lightly. I feel that it would be very bad for Kitely if you do not act in a precautionary manner to create an alternative channel of payments to fall back on if Paypal continues behaving this way.

[Veritas McMaster]

Hi Mike,

It's one thing for a company such as PayPal to prevent you from using their services if you don't comply with their TOS, or even freezing your funds that are stored by them already (which PayPal has been known to do in numerous cases). It's quite different for such a company to charge your credit card or bank account an extra "fine" for breaking a provision of an updated Standard Form contract they forced you to accept after you've already been operating your own business based on the previous agreement they offered you.

I am not a lawyer but to my understanding, the former is legal (to an extent in some jurisdictions) but the latter is knowingly initiating an unauthorized transaction from your connected payment sources based on "contractual consent" that you were forced to give after a form of bait and switch at a point in time when you were no longer able to transition to a different service provider without prohibitive costs (such as the ability to continue billing your existing subscriptions). This goes far beyond a company changing its pricing or prohibiting activities it previously allowed and I highly doubt their legal department would authorize them to actually do that.

While I don't doubt PayPal can, and will, suspend accounts and freeze PayPal balances of people who break their TOS, I highly doubt they would risk trying to charge people money that is not already held by PayPal for breaking said TOS. The liabilities and potential losses from doing that would far outweigh any possible financial benefits they could get from taking such action. Again, I'd love to see a counter example of a company bypassing the legal system and trying to fine their customers directly for TOS violation by charging their external accounts.

[Valiska Sei-Varun]

I killed my PayPal account years ago when I ceased to trust them, but I've been making purchases and donations through their sans-account credit card service for a few places that don't have any other methods. I think such purchases must, in conscience, stop, for everything I can survive without, alas.