VPN providers might be hugely popular, but PayPal is refusing to play ball.
PayPal is no longer accepting payments on behalf of companies offering VPN services because it says they enable copyright infringement.
The company confirmed to TrustedReviews that the decision is an extension of its existing policy to only service lawful operations.
A PayPal spokesperson told us:
“As a global payments company, we have to comply with laws set by governments and regulatory agencies. PayPal does not permit the use of its service for transactions that infringe copyrights or other proprietary rights”
“This policy extends to services that unlawfully facilitate infringement by intentionally enabling access to copyrighted television shows or movies in places where distribution of the content is not authorized by the copyright owners.”
“In line with this policy, PayPal has recently discontinued service to certain businesses that actively promote their services as a means to circumvent copyright restrictions and violate intellectual property laws. We apologize for any disappointment this may cause our users.”
Related: Best VPNs 2016
A VPN, or virtual private network, allows a user to connect to private networks using a public network like the internet.
As such, VPNs allow users to connect to proxy servers to hide identity, secure transactions, and to circumvent certain restrictions.
They were popularised as a method of getting around location blocks enforced by streaming services like Netflix and BBC iPlayer.
However, due to the nature of licensing agreements, circumventing these location restrictions is copyright infringement.
PayPal’s stance is that because companies offering VPN technology are “intentionally enabling” copyright infringement, it will no longer provide payment service to those platforms.
We were first made aware of the issue after receiving an e-mail from Nicholas Lin, the founder of UnoTelly – a very popular VPN service.
“On February 3, 2016, Paypal severed payment our processing agreement unilaterally and without prior warning,” Lin told us. “PayPal indicated that UnoTelly is not allowed to provide services that enable open and unrestricted Internet access.”
He continued: “As a result, UnoTelly can no longer accept payment from PayPal. This development is outside of our control, and I sincerely apologise for the inconvenience.”
UnoTelly representatives claim the company was never informed of PayPal’s moratorium on VPNs, which makes it difficult to appeal the decision.
Speaking to TrustedReviews, Kostas Polichronos, PR manager of UnoTelly, said: “We haven’t been informed about this and as a result we do not know why PayPal decided to cut us off. Furthermore, since we have not been informed about this, there is no email from PayPal to provide.”
“We can only accept credit card payments at the time being but I want to let you know that we are working on adding alternate payment methods in the coming weeks,” Polichronos added.
Do you think PayPal has made the right decision? Let us know in the comments.