In January, a transaction sent by the Reminder to News Media Canada was blocked by PayPal for being noncompliant with PayPal’s “acceptable use policy.”
Reminder, formerly known as the Flin Flon Daily Reminder, is a newspaper published three times a week in Canada.
Reminder publisher Valerie Durnin sent a payment worth $242.95 to the News Media Canada team to enter an article entitled "Syrian family adapts to new life” to the annual Canadian Community Newspaper Awards.
Later, it was discovered that PayPal locked the account of News Media Canada because the transaction contained the keyword “Syria.”
On PayPal, when an institution or an individual sends payment to each other, the transaction is considered a goods or services payment. Under this transactional category, users are required to input the description of the item, good or service being sold to the other party. In the case of the Reminder and News Media Canada, the algorithm was triggered as the Reminder editor included the title of the article which contained the keyword “Syria” in the transaction.
Initially, PayPal blocked the payment for 72 hours and promised the Reminder a response or a follow-up within three days. After 72 hours passed, the PayPal team did not issue an explanation or a response and simply redirected the payment back to the Reminder.
When the Reminder contacted News Media Canada in regards to the failed payment, the News Media Canada team realized that PayPal blocked the incoming transaction from the Reminder and the actual account of News Media Canada, which meant that the PayPal account of News Media Canada wasn’t eligible to receive or send payments to anyone and withdraw balance from the account.
Regardless of the purpose of the payment, the PayPal team continued to lock the account of News Media Canada and demanded the media outlet to provide explicit details about the services it provides and the article.
It was only after a PayPal Canada spokeswoman sent an email to News Media Canada stating that the US Department of Treasury has regulations for sending payments to Syria when the account was restored. The entire process of unlocking the account and having the transaction go through took over a week.
Bitcoin and financial freedom
Such cases involving centralized financial service providers have led to great discomfort for businesses and individuals over the past few decades. PayPal is known for its reckless actions towards consumers, blocking transactions and disabling accounts at their will without attempting to come to a resolution with account holders.
It is important for users to understand the importance of financial privacy and the merit of using a decentralized payment system or currency like Bitcoin. Centralized financial service providers like PayPal shouldn’t be able to block the payments of genuine business operators based on unsubstantiated accusations.