Pushback: Paypal’s blacklisting causes it to lose significant business
It never pays to antagonize your customers: Paypal announced last week that it is laying off 2,500 workers, a reduction of its work force by about 9%, repeating a similar round of layoffs one year ago.
In other words, the company has shrunk by almost 20% since January 2023. The article notes the following financial issues:
Shares of the payments giant have plunged more than 20% over the past year as earnings faltered and the company lowered its full-year guidance for adjusted operating margin. PayPal named [Chief Executive Officer Alex Chriss] last year to replace Dan Schulman.
PayPal was an early disrupter in the payments industry, but rivals including Apple Inc. and Zelle have since crowded the space, leaving PayPal struggling to keep pace. At least four analysts downgraded the stock this month, citing a range of concerns from rising competition to pressure on profitability.
What the article ignores is the blackballing and censorship by Paypal under the leadership of Dan Schulman that directly antagonized its customer base.
In 2021 it joined the blacklist mob by blackballing the business of a Tennessee man who made and sold wooden American flags as decorative home items. It blocked access to more than $35,000 of the man’s own cash and caused a 90% reduction in his business.
Then in 2022 it joined Google in blacklisting the activist group, Gays against Groomers, which strongly opposes the queer agenda being imposed within schools. At the same time it shut down the Paypal account of a Hong Kong pro-democracy group, apparently on instructions (or threats) from the communist Chinese government.
Finally — and far more damaging — in October 2022 it announced a new policy that would allow it to confisicate up to $2,500 from any customers’ Paypal bank account should that customer spread what Paypal arbitrarily considered “misinformation.” While it never instituted that policy as initially announced, Paypal did institute policies allowing it to suspend, limit, or close any accounts it deemed had provided “false, inaccurate or misleading information,” This policy includes legal action and the ability to impose punishments, including fines.
As a result customers have been looking for other options. Four years ago Paypal likely controlled more than 90% of the digital payment market. That market share has since shrunk considerably, now probably below 60%. I myself have seen this drop directly. When Paypal blacklisted that American flag company in 2021 I immediately created new options for people to donate or subscribe to Behind the Black (Zelle and Patreon), and have since seen the percentage of people using Paypal to donate or subscribe dropping by more than 30%. My income rose, but Paypal got less from me because of this trend, caused by its own actions.
While I still use Paypal for such purposes, I continue to encourage my supporters to consider other options when donating or subscribing to Behind the Black. Paypal’s management very clearly decided in 2021 to abandon the American principles of free speech by joining the leftist blacklisting mob that was rampaging across the country at that time, destroying lives needlessly and recklessly all for the sake of power.
By supporting others and reducing Paypal’s dominance can only be a good thing. Not only will this foster competition (always a benefit to the customer), it will help keep the company honest. If it attempts further blacklist actions against anyone the public will immediately have options, and Paypal’s market share will continue to drop.
As always, freedom and competition work to make society more civilized and humane. The more we can encourage it the better for all.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
It never pays to antagonize your customers: Paypal announced last week that it is laying off 2,500 workers, a reduction of its work force by about 9%, repeating a similar round of layoffs one year ago.
In other words, the company has shrunk by almost 20% since January 2023. The article notes the following financial issues:
Shares of the payments giant have plunged more than 20% over the past year as earnings faltered and the company lowered its full-year guidance for adjusted operating margin. PayPal named [Chief Executive Officer Alex Chriss] last year to replace Dan Schulman.
PayPal was an early disrupter in the payments industry, but rivals including Apple Inc. and Zelle have since crowded the space, leaving PayPal struggling to keep pace. At least four analysts downgraded the stock this month, citing a range of concerns from rising competition to pressure on profitability.
What the article ignores is the blackballing and censorship by Paypal under the leadership of Dan Schulman that directly antagonized its customer base.
In 2021 it joined the blacklist mob by blackballing the business of a Tennessee man who made and sold wooden American flags as decorative home items. It blocked access to more than $35,000 of the man’s own cash and caused a 90% reduction in his business.
Then in 2022 it joined Google in blacklisting the activist group, Gays against Groomers, which strongly opposes the queer agenda being imposed within schools. At the same time it shut down the Paypal account of a Hong Kong pro-democracy group, apparently on instructions (or threats) from the communist Chinese government.
Finally — and far more damaging — in October 2022 it announced a new policy that would allow it to confisicate up to $2,500 from any customers’ Paypal bank account should that customer spread what Paypal arbitrarily considered “misinformation.” While it never instituted that policy as initially announced, Paypal did institute policies allowing it to suspend, limit, or close any accounts it deemed had provided “false, inaccurate or misleading information,” This policy includes legal action and the ability to impose punishments, including fines.
As a result customers have been looking for other options. Four years ago Paypal likely controlled more than 90% of the digital payment market. That market share has since shrunk considerably, now probably below 60%. I myself have seen this drop directly. When Paypal blacklisted that American flag company in 2021 I immediately created new options for people to donate or subscribe to Behind the Black (Zelle and Patreon), and have since seen the percentage of people using Paypal to donate or subscribe dropping by more than 30%. My income rose, but Paypal got less from me because of this trend, caused by its own actions.
While I still use Paypal for such purposes, I continue to encourage my supporters to consider other options when donating or subscribing to Behind the Black. Paypal’s management very clearly decided in 2021 to abandon the American principles of free speech by joining the leftist blacklisting mob that was rampaging across the country at that time, destroying lives needlessly and recklessly all for the sake of power.
By supporting others and reducing Paypal’s dominance can only be a good thing. Not only will this foster competition (always a benefit to the customer), it will help keep the company honest. If it attempts further blacklist actions against anyone the public will immediately have options, and Paypal’s market share will continue to drop.
As always, freedom and competition work to make society more civilized and humane. The more we can encourage it the better for all.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
I am leery of Zelle because I think it has poor security. See this from Zelle itself
Only Send Money to Friends, Family and Others You Trust
https://www.zellepay.com/security
How does the fee for Patreon compare to PayPal?
Is a funding source like givesendgo viable for your website?
Minor edit in first sentence: “laying off 2,500”
Andi: Fixed. Thank you!
Paul Revere: Patreon’s fees are slightly less than Paypal, so if you want to use that, go to my Patreon page provided in the tip jar and pick the subscription or donation option of your preference.
As for Givesendgo, I have never even thought about it. I will take a look.
I’m pretty sure that I was the first one to use Zelle to contribute to Robert…
I’m glad to hear of the other options. I dropped my PayPal account in October 2022, and I’m glad to learn that PayPal has suffered for their abusive policies.
Yes, I dropped PayPal for all the horrible things it has done or threatened to do. I do Zell Robert every now and then. I think now for a few bucks!
My son runs a business, Hoffman Tactical, a 3D2A company. He had carefully checked Paypal’s TOS before deciding to use them as his payment processor when he first started. Nothing he does violated their terms.
After inquiring with them about some other issue, Paypal obviously took a closer look then closed his account and said my son was banned from ever doing business from Paypal again. No explanation, no appeal. They held onto my son’s funds for more than 6 months. Fortunately, he didn’t leave much in the account. He was also working to move to a “standard” payment processor so the switch only took about a week. Still, he lost that week of sales.
My husband and I immediately closed our 25 year old Paypal account as did our daughter. My son’s business is doing better than ever with a 2A friendly payment processor and the rest of us are managing just fine without Paypal.
Zelle is owned by a collection of the major banks. Not discriminating is obviously a temporary oversight on their part. GiveSendGo, much like Gab, is attacked by the Left for not discriminating.
A non-profit I am familiar with is shifting over to Stripe. (stripe.com) Anyone familiar with it? I’ve been uncomfortable with PayPal’s anti-legal business attitude but they provide some features that have been helpful to me — what to do? I remember the wooden flag guy. Thanks for the reminder.
n 2021 it joined the blacklist mob by blackballing the business of a Tennessee man who made and sold wooden American flags as decorative home items. It blocked access to more than $35,000 of the man’s own cash and caused a 90% reduction in his business.
Gee, whatta pal!
FJB
FPP
The one reason I continue to use PayPal for my online store and donations to my organization is because PayPal refuses to offer its services to Palestinians in Gaza and the West Bank. https://www.forbes.com/sites/digital-assets/2023/06/23/why-bitcoin-cant-replace-paypal-in-palestine/?sh=39cfdc52db4c
All the “new” payment processors can be divided into three types. (Apropos Julius Caesar on that sentence :-)
First, we have crypto-related payment systems. That’s a big topic in itself, but I won’t say much here beyond pointing out that the security model is radically different from what came before, the amount of freedom you get from de-platforming is up to users implementing their own security, and it will take time for such habits to become mainstream.
Second, we have the Paypal types, with Samsung/Apple pay, Venmo, CashApp, and Chime among them. These are basically credit card or debit card-like processors who simply replaced the plastic card with a phone or web app. Like credit cards, their security model is dependent on vetting merchant accounts. If the merchant account vetting is fairly strict (like Apple/Samsung) the only real difference is whether a phone is more convenient than a card (maybe, but it is certainly less reliable) or more secure (with chip card readers now ubiquitous, not the case anymore). The others, borrowing the growth-at-all-costs strategy from Paypal’s early days, allow most or all accounts to receive money by default and do little vetting. This makes them rife with fraud and they either have to play wack-a-mole, as PayPal does, or just look the other way, as Chime and CashApp (famously) do. In the whack-a-mole game, suspicion is subjective and subject to the biases of key players who insert their petty prejudices into the process. In the look-the-other-way game, you have to buy off regulators to look the other way, and de-platforming policies conform to the prejudices of the government class.
Third, we have check-like payment systems, like Zelle, ACH, and, well, mailing checks. The security model here is based on banks’ retail presence and, for actual checks, there are some security features in the paper. An important difference is that banks make their money by paying low interest on deposits, and not exclusively on transaction fees, so they have more to lose by frivolously de-platforming a customer due to a politically unfavored *payment* transaction. Many banks work in local markets so they can’t replace de-platformed depositors with Si-Valley style growth.
Looking across the situation, I would say that the de-platforming suckage of the card-processors is mostly baked into their security model, so switching from PayPal to, for example, Apple Pay, isn’t going bring lasting relief. Gab’s “Parallel” card now uses MasterCard rails so the jury is still out if those guys can fend off the de-platforming mob; I am surprised they made it this far, so who knows? Zelle is probably a bit more resistant, especially if you are using a local or regional bank. Supporting mailed-in checks is easy. And yeah, crypto is here to stay and you are going to have to learn to use it sooner or later. It won’t be a high percentage of your payments; due to fiat-conversion friction even crypto users will spend fiat first, according to Gresham’s Law. But every crypto payment you get will likely be one that would otherwise have been lost due to privacy or de-platforming issues. You don’t use your fire extinguisher much, either, but when you do, it sure is important.
Fred Fagal: Thanks to you and all the others who read this essay and decided to donate also. The February campaign up until now had been a little lackluster, though acceptable. Now it is doing great!
I’ve been permantly banned from PayPal and it’s offshoots like Venmo for a long time. Never could find the reason. I use Zelle instead.
“As always, freedom and competition work to make society more civilized and humane. The more we can encourage it the better for all.”
This is why the Supreme Court will tell Colorado to put Trump on the ballot. And just the opposite for keeping foreigners (i.e. illegal aliens), out of the U.S. We (used to) have rules for this sort of thing.
Cancelled my paypal many years ago. I didn’t see the point, like an extra middle-man. For the on-line shopping I do whether it’s ebay, Craig’s list, or any number of stores or services (never Amazon) my bank CC works just fine. The few times I’ve ever had a dispute my bank swiftly and satisfyingly comes to my defense. If it’s transferring money were talking about, they can wait for my check! Incidentally, my main bank is Chase (they keep suggesting Zelle. It looks like a creature with three eyes to me.) and the service is good but I plan to phase away from them in favor of a local bank with a good reputation.
Finally, Locally I usually use cash at small businesses as a token of support – Nobody has to pay a fee.
Check is in the mail – just for the fun of it. I can’t remember the last time I mailed a check.
I stopped using PayPal years ago because of these issues. And LinkedIn too.