Tag Archives: PayPal

PayPal Claims It Never Intended To Fine Users For “Misinformation”

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PayPal said it had no intention fining customers for spreading misinformation, after attracting criticism for publishing a new user agreement outlining such a plan, Bloomberg reported.

According to Bloomberg, the issue gained traction over the weekend after the company published policy updates prohibiting users from using the PayPal service for activities identified by the company as “the sending, posting, or publication of any messages, content, or materials” promoting misinformation, in an Acceptable Use Policy due to kick in on Nov. 3. A penalty of $2,500 could be imposed for each violation, according to the update.

The notice included “incorrect information,” a spokesperson for PayPal said in a statement to Bloomberg News. “PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy”.

Bloomberg also reported that PayPal’s shares tumbled as much as 5.3% to $85.43, the biggest intraday decline since July 26. They dropped 4.7% to $85.90 at 9:48 a.m. New York.

Gizmodo reported that PayPal was caught in a firestorm of conservative backlash over the weekend for daring it say it would not allow its services to be used to promote misinformation. Now, the company has walked everything back, and further claimed that policy was one big misunderstanding.

According to Gizmodo, several conservative outlets reported that PayPal had updated its Acceptable Use Policy with a notice that starting Nov. 3, the company’s prohibited activities would include “the sending, posting, or publication of any message, content, or materials” promoting disinformation and hate speech or otherwise causing harm. Those who violated the policy could have been hit with a $2,500 fine against their PayPal account, according to information detailed in the initial AUP changes.

PayPal retracted a the notice over the weekend, and in a statement to Gizmodo a company spokesperson wrote:

“An AUP notice for the U.S. recently went out in error that included incorrect information. PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy. We’re sorry for the confusion this has caused.”

The thing I’m wondering about is what, exactly, happened over at PayPal? Was the messaging about imposing a $2,500 fine for each violation promoting misinformation really what PayPal intended? Did that wording get into the AUP due to a disgruntled writer, seeking some sort of revenge on the company? Was the proofreader on their day off?

This situation must be a costly and very embarrassing problem for PayPal to try and cope with. The company that actually posted about fining people for posting misinformation certainly appears to have posted misinformation themselves. The irony in trying to walk back their own misinformation is something.

PayPal Expands Services to Allow Users to Send Money To Ukrainians

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PayPal announced that it is expanding its money services to help Ukraine humanitarian efforts. In short, it is offering specific services that will enable people to provide help. It also included a step-by-step way for Ukrainian people to set up a PayPal account.

As the crisis deepens, there is an ever growing need to help people in the region access critical humanitarian funds. PayPal is rolling out an expansion of its services available in Ukraine to provide its customers with ways to send money quickly and securely to friends, family, and loved ones.

There are new services that PayPal has made available to the Ukrainian people:

Friends & Family P2P Payments: New and existing Ukrainian PayPal account holders will be able to send and receive peer-to-peer (P2P) payments from friends and family and to transfer funds from their Ukrainian PayPal Wallet to an eligible Mastercard or Visa debit or credit card.

Transfer Funds from PayPal Wallet: Ukrainian customers who receive money from friends and family in their Ukrainian PayPal Wallet will be able to transfer these funds to their bank account by linking an eligible Mastercard or Visa debit card, or to an eligible Mastercard or Visa debit card.

Waiving of PayPal’s Fees: In an effort to provide customer access to critical funds, PayPal will be temporarily waiving its own fees for customers sending funds to Ukrainian PayPal accounts. Xoom, PayPal’s international remittance service, is also waiving transaction fees for payments sent to recipients in Ukraine. Fees charged by a customer’s card issuer or bank may still apply.

TechCrunch reported: The announcement from PayPal follows a request from the Ukrainian government asking the payment company to roll out new services that would allow people in the country to receive access to payments. According to TechCrunch, PayPal shut down services in Russia earlier this month.

PayPal’s new services appeared after Vice Prime Minister of Ukraine and Minister of Digital Transformation, Mykhailo Federov, made his request to PayPal. On March 17, 2022, Mykhalio Federov tweeted: “Welcome to Ukraine! @PayPal, @Dan_Schulman, thank you for supporting Ukraine and peace!” The tweet included a copy of a letter that PayPal sent to “Deputy Prime Minister Federov”.

Mykhalio Federov followed up with another tweet: “Now we are waiting for you in Ukraine @Stripe [winking smile face emoji]”

I’m not a big fan of PayPal, but I am happy that the company is doing a good thing for the Ukrainian people. Maybe this will set a precedent for how PayPal responds when war breaks out somewhere else in the world.

Visa and Mastercard Suspend Their Operations in Russia

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Both Visa and Mastercard announced that they were suspending their operations in Russia. They each made their own statements. Bloomberg reported that each company gets about 4% of its net revenue from business linked to Russia.

Visa posted a statement on its website titled: “Visa Suspends All Russia Operations”. Here is Visa’s statement:

Visa today announced it is suspending its Russia operations.

Effective immediately, Visa will work with its clients and partners within Russia to cease all Visa transactions over the coming days. Once complete, all transactions initiated with Visa cards issued in Russia will no longer work outside the country and any Visa cards issued by financial institutions outside of Russia will no longer work within the Russian Federation.

“We are compelled to act following Russia’s unprovoked invasion of Ukraine and the unacceptable events that we have witnessed,” said Al Kelly, chairman and chief executive officer of Visa, Inc. “We regret the impact this will have on our valued colleagues, and on the clients, partners, merchants, and cardholders we serve in Russia. This war and the ongoing threat to peace and stability demand we respond in line with our values.”

Mastercard posted a longer statement titled: “Mastercard Statement on Suspension of Russian Operations”. Here is part of that statement:

…It’s with all this in mind – and noting the unprecedented nature of the current conflict and the uncertain economic environment – we have decided to suspend our network services in Russia.

This decision flows from our recent action to block multiple financial institutions from the Mastercard payment network, as required by regulators globally.

With this action, cards issued by Russian banks will no longer be supported by the Mastercard network regardless of where they’re used – inside or outside of Russia. And, any Mastercard issued outside the country will not work at Russian merchants or ATMs…

According to Bloomberg, the decisions made by Visa and Mastercard came hours after Ukranian President Volodymyr Zelenskiy called on the companies to halt all business in Russia during a call with U.S. lawmakers.

Reuters reported that PayPal has also shut down its services in Russia. According to Reuters:

“Under the current circumstances, we are suspending PayPal services in Russia,” President and Chief Executive Officer Dan Schulman said in a statement. He added that the company “stands with the international community in condemning Russia’s violent military aggression in Ukraine.”

PayPal Might Purchase Pinterest

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Bloomberg reported that PayPal Holdings Inc. is exploring an acquisition of social media company Pinterest Inc., according to people with knowledge of the matter. Bloomberg wrote that PayPal approached Pinterest about a potential deal in private talks. The companies have discussed a potential price of around $70 a share (according to people who were in private talks and who did not want to be identified).

That would value Pinterest at about $45 billion for the entire company, including its Class B shares. A deal at that level would represent about a 26% premium to Pinterest’s Tuesday closing price of $55.58.

It is not unheard of for a big company, who is interested in acquiring another company, to change its mind and back out. It seems to me that most of the time the companies find a way to complete the acquisition. It could go either way, though.

The Guardian reported that Pinterest has more than 478 million active users. It started as a social media company, offering users a way to store and share favorite images. Since then, Pinterest has expanded into visual search and e-commerce. According to The Guardian, Pinterest signed a deal with Shopify, an e-commerce platform for online retailers, to allow its customers to create catalogs on Pinterest.

I think this is why PayPal is considering acquiring Pinterest. PayPal might want to benefit from those user-created catalogs by connecting them to PayPal’s services. The New York Times reported that PayPal faces increasing competition in digital payments. It appears that one of PayPal’s competitors is Stripe, which The New York Times says has gained ground in recent years, hitting a private valuation of $95 billion.

Personally, I don’t like PayPal or Pinterest. I had a really bad experience with PayPal recently, which was so incredibly frustrating and stressful that I decided to stop using PayPal. In my opinion, Pinterest appears to allow users to grab images from anywhere on the internet without crediting the artist or linking to the source of the image. That’s not good at all for the artists who created those works.

PayPal is Raising Merchant Fees on Some Transactions

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PayPal posted an article titled: “Upcoming Changes for Some US Businesses”. The new rates will apply to a portion of their merchant customers in the U.S. beginning on August 2, 2021.

Here is what is changing:

PayPal Digital Payments: For PayPal products, (such as PayPal Checkout, Pay with Venmo, Pay in 4, PayPal with Rewards, Checkout, and crypto), which include Seller Protection on eligible transactions, the new rate for online transactions will be 3.49% + 0.49 per transaction.

In-person Payments: For PayPal and Venmo QR code transactions over $10, the new rate will be 1.90% + $0.10. For transactions that are $10 and under, the rate will be 2.40% + $0.05. For certain in-person debit and credit transactions the rate will be 2.29% + $0.09.

Credit and Debit Card payments: Online credit and debit card transactions will be 2.59% + $0.49 per transaction without Chargeback Protection, or 2.99% + $0.49 with Chargeback Protection.

Charity Transactions: Fees for charity transactions will be 1.99% + $0.49 for confirmed charities (subject to application and pre-approval).

Non-standard Pricing: For U.S. merchants who have custom, non-standard pricing, rates will remain unchanged for those services as agreed.

The Verge reported that in the past, PayPal has had a flat rate for sellers processing payments, charging 2.9 percent of a transaction price, plus a 30-cent fee. The new higher rates will apply to the company’s newer products like PayPal Checkout, and Pay with Venmo.

Fortunately, there are alternatives to PayPal.

Ko-fi does not take any fees. (They make their money from Ko-fi Gold subscriptions and donations to their own Ko-fi page.) If you have a Ko-fi account, and connected it to your PayPal account as a payment processor, PayPal will still take its transaction fees.

Stripe charges fees that are lower than PayPal’s. Cards and Wallets: 2.9% + 30 cents; Bank debits and transfers: 0.8% – $5.00 cap; Additional payment methods: starting at 80 cents. Stripe offers invoicing at 0.4% per paid invoice with the first 25 invoices free per month.

PayPal to Acquire Honey

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PayPal announced that it has agreed to acquire Honey Science Corporation, a rapidly-growing technology platform for shopping and rewards, for approximately $4 billion.

The acquisition supports PayPal and Honey’s shared mission to simplify and personalize shopping experiences for consumers while driving conversion and increasing consumer engagement and sales for merchants. The combination will help accelerate growth across both companies.

Honey posted on its website about the acquisition. “When we started Honey, our mission was to make money fair. What started as coupons has since grown into multiple products that work together to turn inefficiencies into time and money savings for everyone.”

PayPal was the first company to pull out of Facebook’s Libra project. At the time, PayPal said it wanted “to continue to focus on advancing our existing mission and business priories as we strive to democratize access to financial services for underserved populations.” It sounds like PayPal and Honey have matching goals.

I find this acquisition to be interesting because it appears to be consumer-focused. TechCrunch reported that Honey has a suite of money-saving tools to help people track prices, get alerts, and browse offers. It also has a rewards program. PayPal hopes to add Honey’s technology to its own product line, which would open up Honey’s tools to PayPal’s 300 million users.

PayPal Withdraws from Facebook’s Libra

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CNBC reported that PayPal is withdrawing from Facebook’s Libra Association. CNBC provided a statement from PayPal:

PayPal has made the decision to forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations.

Facebook announced its Libra cryptocurrency and Calibra, a digital wallet for Libra, in June of 2019. The U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing about Facebook’s Libra project on July 16, 2019.

CNBC points out that David Marcus, who leads the Libra project at Facebook was previously the president of PayPal. According to CNBC, PayPay said that it is still “supportive of Libra’s aspirations” and that it will continue to partner with Facebook in the future.

Bloomberg reported that several founding members of the Facebook-led Libra project have been wavering whether to fully embrace the effort. According to Bloomberg, there are concerns about maintaining positive relationships with regulators who have reservations about the initiative.

The Libra Association is a group of 28 founding member companies. The organization asked those members to reaffirm their commitment to the project later this month. Before Libra was unveiled, those companies signed nonbinding letters of intent to explore the association.

CNBC reported that all founding members were expected to invest a minimum of $10 million to fund the operating costs of the association and to launch an incentive program to drive adoption. It appears that those investments have not been made.

Now, with PayPal withdrawing from the Libra Association, things aren’t looking so good. I think it might be a bit scary to be the first company to withdraw from something like this. As soon as one does, though, it creates a path for other companies to choose to leave as well.