Do you really think basing a payment service on a domain controlled by Libya inspires trust?
Since part of the registration fees go directly to the government, registering a .ly domain is about the shortest route you can take to get funds into the hands of terrorists planning attacks on western countries without being subjected to a criminal investigation in the US.
It is fun to play pretend on the internet that your actions have no impact on the real world, but you should take a few minutes to reflect on what your business is supporting.
If it was such a wide spread problem, an issue to fight for, the US government disallow any payments to Libya from US banks.