6 ms·

PayPal Bans BitTorrent Friendly VPN Provider

116 points by llambda 14y ago

crazygringo 14y ago
People have long been worked up over net neutrality. But what about payment neutrality? It seems like it's just as important, if not more. Why don't we hear enough from people demanding laws that prevent payment processors above a certain size from discriminating based on categories of goods and services? Why can't we make it illegal for MasterCard and Visa to stop processing payments destined for Wikileaks, or PayPal to stop processing payments to VPN providers? This seems to be to be a clear abuse of monopoly power or at least market share, and there isn't even a whiff of transparent, due process in it.
- citricsquid 14y ago
  Surely it would be backwards to dictate who payment processors can and cannot do business with. There are risks involved with banking, a bank will not give a mortgage to a minimum wage worker and we don't expect them to due to the risks associated with such a mortgage, why should a payment processor be expected to take the risks that banks are not?
  - gringomorcego 14y ago
    Uh, so it's okay for the US to wink wink at Amazon, Paypal and numerous other financial payment providers when Wikileaks comes to play? You sound like a true apologist. This stuff matters, it affects people's lives, and it it has NOTHING to do with ROI. That's a bunch of BS. This has to do with favors and stancing and has absolutely nothing to do with profitability or providing a service. I'll show myself the door when I hear about how many chargebacks the VPN was getting.
    - citricsquid 14y ago
      You're conflating 2 unrelated issues here. It's not okay for the United States government to request (secretly) for a private enterprise to engage in acts that are detrimental to an individual or business because the United States is unable to do anything themselves within the law, however I don't see how the action taken against Wikileaks has any relevance to the action taken against this business. What indication is there that the US requested this?
  - gwern 14y ago
    Paypal's listed justification has nothing to do with the risk of doing business with the VPN; no previous problems were mentioned.
  - revelation 14y ago
    Once a bank does take someone on, there are very strong regulations on what they can and can not do. A bank can't just cut you off and freeeze your money, as PayPal has done here.
  - mistercow 14y ago
    Dictating what categories are not legitimate reasons for rejecting someone is not the same as "you have to accept everyone!" Obviously, PayPal should be allowed to reject actual criminal enterprises, for example. But there is nothing illegal about VPNs that protect your anonymity. Besides, I think it's clear that any legislation that disallowed payment processors from discriminating against businesses would also have to give them legal protection in the case that said business end up being sued.
- mtgx 14y ago
  Doesn't Paypal censor payments for certain types of books now, too?
  - scalable 14y ago
    https://action.eff.org/o/9042/p/dia/action/public/?action_KEY=8515&a https://action.eff.org/o/9042/p/dia/action/public/?action_KE... "UPDATE (3/13/12): After public pressure, PayPal has revised their policy censoring publishers of erotic ebooks."
- kiba 14y ago
  It's called "Bitcoin", simply because it can serve as an independent non-political payment network. However, its usefulness is limited by poor infrastructure and limited marketshare. Bitcoin is getting more useful, though. There's Bitcoin ATM, smartcards for bitcoin wallets, mobile app that utilize QR code, etc.
  - sltkr 14y ago
    It's also impossible to charge recurring fees, and unlike Paypal etc, transactions take at least 10 minutes on average to clear (and around an hour if you want a decent amount of security). For TorGuard that is probably acceptable, but in situations where you want to give your customers immediate access to your service, it's far from ideal.
    - rictic 14y ago
      If you're giving someone access to a service that you can revoke (e.g. web hosting, VPN, etc), it doesn't seem like there's any practical risk in optimistically giving someone access once you see the spend hit the bitcoin network. It's not infeasible to do that in a matter of seconds. If you're shipping something physical you're not going to be working on a timescale less than an hour anyways. Really the only time that I see Bitcoin's transaction processing speed being an issue is when you're doing a moderate to large transaction where waiting around would be inconvenient.
      - cookiecaper 14y ago
        Someone can chain fake btc transactions to your system granting themselves an infinite supply of access on short-lived accounts if you accept an immediate validation.
        zhoutong 14y ago
        No one can ever fake transactions out of thin air. Bitcoin is cryptography. The requirement for confirmation is due to possible double spending, which will cost far more than a VPN account to do it successfully (to cheat a 0-confirmation system).
- DanBC 14y ago
  Because there are strict laws in place to prevent money laundering and there are fierce protections to help reduce fraud. Asking money services to handle payments for anyone is problematic.
- netcan 14y ago
  Good point. And it's not even necessarily about abuse of monopoly, at least its traditional implications. Calling it justice or freedom seems melodramatic, but I don't have better langage for it. For example, paypal's advantage is (supposedly) in fraud detection. But they aren't picking up on fraud, they are picking up on fraud risk. An individual or business can register as risky for some apparently arbitrary reason and effectively be banned from a big slice of online commerce. Paypal have no mandate to provide a service to everyone, they might be better off banning 10% of the total population as high risk and passing those savings onto the remaining 90%. Thats completely reasonable as a business decision. Not really different to simply deciding not to open a shop in Eindhoven. But when it's Paypal it becomes a justice/freedom issue. A person is disadvantaged without access to it.
stfu 14y ago
Not really a new problem. I remember using the pre-ipredator PirateBay VPN provider and they got shoot down by PayPal as well. My current VPN sends me PayPal payment invoices for bogus products apparently just to avoid getting in trouble with PayPal. Running a VPN is not really a business I would want to be in.
wcoenen 14y ago
There appear to be a number of VPN providers accepting bitcoin: https://en.bitcoin.it/wiki/Trade#Connectivity https://en.bitcoin.it/wiki/Trade#Connectivity edit: and the VPN service that the article talks about (https://torguard.net/ https://torguard.net/) already accepts bitcoin.
hastur 14y ago
We can't force PayPal to do anything. They're not breaking the law and law should not be amended to make this behavior illegal. Just don't use PayPal. I don't.
- zem 14y ago
  surely freezing thousands of dollars of someone else's money should be made illegal
- jlgreco 14y ago
  > " and law should not be amended to make this behavior illegal." Why not?
hastur 14y ago
The funny thing is that PayPal was originally intended to provide safe, transnational money exchange beyond the control of governments. (Somewhat like Bitcoin today.) So they wanted to be a solution to a problem. Now PayPal is part of the problem.
- incongruity 14y ago
  They've done a great job of being a bank while not being regulated like a bank. It'd be kind of impressive, if it weren't so damn problematic for users/customers.
- ef4 14y ago
  Yeah, they got big enough fast enough that it wasn't practical to squash them. So they got incorporated into the system instead. If anybody finally does manage to create a transnational money beyond governments, it's going to need to be highly decentralized.
  - joering2 14y ago
    > If anybody finally does manage to create a transnational money beyond governments, it's going to need to be highly decentralized. ok, but can you explain why Bitcoin is not starting to fill out this shoe already??
    - kristofferR 14y ago
      Tons of reasons. Here's a few: * Hard to use, you need to exchange "real" money to use it - you can't just link up your bank account like on Paypal and start using it right away. * You either need to totally trust a 3rd party provider with your money (and if they lose/steal it - that's your problem) or run a clunky and slow application on your computer which requires several GBs of HD space (faster, lighter apps are coming) * Slow, a transaction can take 10-20 minutes to finish (which means that you can't get instant order confirmations/digital product delivery like people are used to when paying with Paypal/Credit Cards).
      - 14y ago
chris123 14y ago
Just an invitation to competitors such as Bitcoin, etc.
einhverfr 14y ago
I thought this quote was funny, "Most of our clients have been very patient since almost everyone has been wronged by PayPal at some time or another,” he added. Yep, I can sympathize with that....

116 points by llambda 14y ago

People have long been worked up over net neutrality. But what about payment neutrality? It seems like it's just as important, if not more. Why don't we hear enough from people demanding laws that prevent payment processors above a certain size from discriminating based on categories of goods and services? Why can't we make it illegal for MasterCard and Visa to stop processing payments destined for Wikileaks, or PayPal to stop processing payments to VPN providers? This seems to be to be a clear abuse of monopoly power or at least market share, and there isn't even a whiff of transparent, due process in it.

citricsquid 14y ago
Surely it would be backwards to dictate who payment processors can and cannot do business with. There are risks involved with banking, a bank will not give a mortgage to a minimum wage worker and we don't expect them to due to the risks associated with such a mortgage, why should a payment processor be expected to take the risks that banks are not?
- gringomorcego 14y ago
  Uh, so it's okay for the US to wink wink at Amazon, Paypal and numerous other financial payment providers when Wikileaks comes to play? You sound like a true apologist. This stuff matters, it affects people's lives, and it it has NOTHING to do with ROI. That's a bunch of BS. This has to do with favors and stancing and has absolutely nothing to do with profitability or providing a service. I'll show myself the door when I hear about how many chargebacks the VPN was getting.
  - citricsquid 14y ago
    You're conflating 2 unrelated issues here. It's not okay for the United States government to request (secretly) for a private enterprise to engage in acts that are detrimental to an individual or business because the United States is unable to do anything themselves within the law, however I don't see how the action taken against Wikileaks has any relevance to the action taken against this business. What indication is there that the US requested this?
- gwern 14y ago
  Paypal's listed justification has nothing to do with the risk of doing business with the VPN; no previous problems were mentioned.
- revelation 14y ago
  Once a bank does take someone on, there are very strong regulations on what they can and can not do. A bank can't just cut you off and freeeze your money, as PayPal has done here.
- mistercow 14y ago
  Dictating what categories are not legitimate reasons for rejecting someone is not the same as "you have to accept everyone!" Obviously, PayPal should be allowed to reject actual criminal enterprises, for example. But there is nothing illegal about VPNs that protect your anonymity. Besides, I think it's clear that any legislation that disallowed payment processors from discriminating against businesses would also have to give them legal protection in the case that said business end up being sued.
mtgx 14y ago
Doesn't Paypal censor payments for certain types of books now, too?
- scalable 14y ago
  https://action.eff.org/o/9042/p/dia/action/public/?action_KEY=8515&a https://action.eff.org/o/9042/p/dia/action/public/?action_KE... "UPDATE (3/13/12): After public pressure, PayPal has revised their policy censoring publishers of erotic ebooks."
kiba 14y ago
It's called "Bitcoin", simply because it can serve as an independent non-political payment network. However, its usefulness is limited by poor infrastructure and limited marketshare. Bitcoin is getting more useful, though. There's Bitcoin ATM, smartcards for bitcoin wallets, mobile app that utilize QR code, etc.
- sltkr 14y ago
  It's also impossible to charge recurring fees, and unlike Paypal etc, transactions take at least 10 minutes on average to clear (and around an hour if you want a decent amount of security). For TorGuard that is probably acceptable, but in situations where you want to give your customers immediate access to your service, it's far from ideal.
  - rictic 14y ago
    If you're giving someone access to a service that you can revoke (e.g. web hosting, VPN, etc), it doesn't seem like there's any practical risk in optimistically giving someone access once you see the spend hit the bitcoin network. It's not infeasible to do that in a matter of seconds. If you're shipping something physical you're not going to be working on a timescale less than an hour anyways. Really the only time that I see Bitcoin's transaction processing speed being an issue is when you're doing a moderate to large transaction where waiting around would be inconvenient.
    - cookiecaper 14y ago
      Someone can chain fake btc transactions to your system granting themselves an infinite supply of access on short-lived accounts if you accept an immediate validation.
      - zhoutong 14y ago
        No one can ever fake transactions out of thin air. Bitcoin is cryptography. The requirement for confirmation is due to possible double spending, which will cost far more than a VPN account to do it successfully (to cheat a 0-confirmation system).
DanBC 14y ago
Because there are strict laws in place to prevent money laundering and there are fierce protections to help reduce fraud. Asking money services to handle payments for anyone is problematic.
netcan 14y ago
Good point. And it's not even necessarily about abuse of monopoly, at least its traditional implications. Calling it justice or freedom seems melodramatic, but I don't have better langage for it. For example, paypal's advantage is (supposedly) in fraud detection. But they aren't picking up on fraud, they are picking up on fraud risk. An individual or business can register as risky for some apparently arbitrary reason and effectively be banned from a big slice of online commerce. Paypal have no mandate to provide a service to everyone, they might be better off banning 10% of the total population as high risk and passing those savings onto the remaining 90%. Thats completely reasonable as a business decision. Not really different to simply deciding not to open a shop in Eindhoven. But when it's Paypal it becomes a justice/freedom issue. A person is disadvantaged without access to it.

stfu 14y ago

Not really a new problem. I remember using the pre-ipredator PirateBay VPN provider and they got shoot down by PayPal as well. My current VPN sends me PayPal payment invoices for bogus products apparently just to avoid getting in trouble with PayPal. Running a VPN is not really a business I would want to be in.

wcoenen 14y ago

There appear to be a number of VPN providers accepting bitcoin: https://en.bitcoin.it/wiki/Trade#Connectivity https://en.bitcoin.it/wiki/Trade#Connectivity edit: and the VPN service that the article talks about (https://torguard.net/ https://torguard.net/) already accepts bitcoin.

hastur 14y ago

We can't force PayPal to do anything. They're not breaking the law and law should not be amended to make this behavior illegal. Just don't use PayPal. I don't.

zem 14y ago
surely freezing thousands of dollars of someone else's money should be made illegal
jlgreco 14y ago
> " and law should not be amended to make this behavior illegal." Why not?

hastur 14y ago

The funny thing is that PayPal was originally intended to provide safe, transnational money exchange beyond the control of governments. (Somewhat like Bitcoin today.) So they wanted to be a solution to a problem. Now PayPal is part of the problem.

incongruity 14y ago
They've done a great job of being a bank while not being regulated like a bank. It'd be kind of impressive, if it weren't so damn problematic for users/customers.
ef4 14y ago
Yeah, they got big enough fast enough that it wasn't practical to squash them. So they got incorporated into the system instead. If anybody finally does manage to create a transnational money beyond governments, it's going to need to be highly decentralized.
- joering2 14y ago
  > If anybody finally does manage to create a transnational money beyond governments, it's going to need to be highly decentralized. ok, but can you explain why Bitcoin is not starting to fill out this shoe already??
  - kristofferR 14y ago
    Tons of reasons. Here's a few: * Hard to use, you need to exchange "real" money to use it - you can't just link up your bank account like on Paypal and start using it right away. * You either need to totally trust a 3rd party provider with your money (and if they lose/steal it - that's your problem) or run a clunky and slow application on your computer which requires several GBs of HD space (faster, lighter apps are coming) * Slow, a transaction can take 10-20 minutes to finish (which means that you can't get instant order confirmations/digital product delivery like people are used to when paying with Paypal/Credit Cards).
    - 14y ago

chris123 14y ago

Just an invitation to competitors such as Bitcoin, etc.

einhverfr 14y ago

I thought this quote was funny, "Most of our clients have been very patient since almost everyone has been wronged by PayPal at some time or another,” he added. Yep, I can sympathize with that....