Paypal has started banning accounts selling anything Bitcoin-related
bitcointalk.org
bitcointalk.org
To clarify: we have no policies against using PayPal to sell Bitcoin mining rigs.
We don't support any currency txn whether fiat or BTC for a host of regulatory
issues. But we treat BTC and any FX txn the same way. We're believers in
BTC though.
The OP was selling casascius coins, which contain bitcoin private keys (digital currency) and are therefore against the terms of service. The CS rep the OP talked to incorrectly communicated that ALL bitcoin related items were banned. Later Paypal and their CEO issued a statement clarifying that only digital currencies themselves were banned.
http://www.reddit.com/r/Bitcoin/comments/1v12p4/well_done_pa...
http://www.reddit.com/r/Bitcoin/comments/1v3qhw/update_well_...
Seriously, it's an anonymous Internet forum. Anything without proof should be assumed as false.
By the way, my post title was changed by someone else. Paypal is NOT banning anything Bitcoin related, they are only banning Bitcoin exchanges for fiat currencies.
Sadly, this is a well-known issue on HN:
https://news.ycombinator.com/item?id=6216685
Although that open letter received a lot of attention, nothing has changed since then: No transparency which admin "corrected" the title, not even an indication that this kind of manipulation happened at all. So you as the submitter receive all complaints about the crappy title.
@pg: Note that I fully understand that we HN submitters should not be encouraged to use link-baity names for our submissions. And that we should prefer the original title wherever feasible. But some articles' titles are crap. Some are uninformative, some are misleading, and some titles are even wrong. If it is recommened to remove link-baity numbers from titles ("10 Ways To Do X" -> "How To Do X"), why isn't it equally feasible to replace misleading/wrong titles with informative/correct titles?
I suggested via email that they could let veteran users flag inappropriate (link-baity/editorialized/inaccurate) titles and have moderators change them in that case, but I never received any answer.
To deface paypal? Seems unlikely
Sigh.
from http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001....
That particular section may or may not cover Paypal, but certainly you don't get out of the money transmitting rules by not dealing with "money."
I never said that Paypal isn't a money transmitter, nor that there are not any other FinCEN rules both PayPal and others have to follow.
As the other responder pointed out, Paypal would be a money transmitter under FinCEN regulations. What FinCen was saying is that Bitcoin and other digital currencies aren't "currencies" in the legal sense because they have no government backing. However, they are "virtual currencies" in the sense that they otherwise function and behave as true currencies. Consequently, the FinCEN regulations apply to Bitcoin and other digital currencies.
FinCEN further stated that miners and persons who are using Bitcoin in non-currency transactions(i.e., paying for services, physical goods, or non-digital-currency intangible goods) are not subject to the FinCEN regulations because they aren't exchanging one currency for another, directly or indirectly, and they aren't functioning as commercial money transmitters.
It might very well be incorrect, but "the CEO denied these claims" is very low proof in my book.
They most certainly kill things dealing with crypto-currencies.
The questions is it overly-sensitive anti-fraud, or overly-sensitive anti-competition.
It's also a potential huge competitor for PayPal.
As you suggest, they would continue to provide their service, but instead of PayPal accounts being funded through Visa/MasterCard (X% txn fee) they could be funded through Bitcoin (0% txn fee).
(disclosure: I currently own some eBay Inc stock)
Sometimes you go for what most of your customers already know or want, or you go for whats easier and handier, or you go for what is a known quantity and wont have legal or other problems down the line, you go for what's less volatile, etc etc.
The only reason a big company like PayPal would ever use something like Bitcoin as it is today, is not to "take advantage of what it offers", but as a "early adopter marketing ploy", to get some tons of free press and publicity (while still relegating it safely to 1/10000 of their actual businesses).
I don't think PayPal would go out of their way to push BTC. They're almost certainly taking a "wait and see" approach. The primary thing I unsuccessfully was trying to get across was that PayPal probably does not particularly fear or seek to undermine Bitcoin. It's likely to be upside for them.
However, from a consumer / vendor perspective, paypal acts more as a regular payment processing. In that market, the vendor is the client, most of the features you enjoy as a user of services like Paypal or VISA (protection, credit, free transaction, ...) is paid for by the vendor. So their point of view is what matters and right now, they are not happy.
Of course as you noted, Bitcoin on its own is not a competitor to anything except "mailing a check" type transaction. But it can enable creating competing services much more easily than before.
So Paypal customer support apparently just does whatever they want to do, at the individual agent level.
If you buy something with a credit card, you can chargeback by claiming a defective product and get your money back from the card companies. Then the card companies go to the seller to get their money back. In this case, the credit card companies only have a relationship with PayPal, not you, so they come to PayPal to get their money back. PayPal fights them but if they lose then they pay up, then they come to you to get the money back from you, and you obviously refused to pay. You can imagine what this kind of thing does to PayPal's business.
Paypal were the ones that ended up getting screwed in that transaction. Just be glad it wasn't you.
What's the alternative? For them to err in favour of the merchant, occasionally screwing consumers? When bad stuff happens in transactions (online or offline) merchants should be prepared to sometimes take the hit. It's so much better than loss of consumer confidence.
Look at the general willingness of large retailers to accept returns. They do it because they want consumers to buy without second thoughts.
Sold a Blackberry on eBay and shipped with tracking. The seller claimed it didn't work with their network and despite me listing it as 'no returns' sent back a different (cheaper/older) Blackberry to me.
I told eBay and they told me to contact the police but not before returning the money to the buyer and putting my account in the red.
I immediately removed all my bank and card details from Paypal and requested my account be closed.
I waited a week and opened a new account using new card and bank details. Thankfully they've never linked the 2.
'No returns' in eBay World means 'the buyer keeps the item and receives a refund' if the item is not as described / non-functional etc. Or even if the buyer bought it in error.
It doesn't mean 'all sales are final', as many sellers appear to think.
They're well-known for freezing accounts at a whim, and as a merchant I keep nothing in PayPal longer than a day. I don't keep anything in there as a buyer either; they're perfectly happy to fund purchases directly from a bank or CC account. It's just plain safer if PP has as little of my money as possible.
Check out number 4
Look at what happened in the Worgl experiment - http://en.wikipedia.org/wiki/W%C3%B6rgl - once the idea gained traction the central bank outright banned it, so that other towns considering it, could not start up a competing currency.
Can Bitcoin be banned? Not without crushing the Internet; but if made illegal (or just subject to very onerous reporting requirements) such that businesses in the USA could not easily use it, it would stop Bitcoin's growth dead.
There is no real economy backing Bitcoin.
At some point you need to convert BTC to real money for taxing and what not and this conversion is the perfect place to ban it if so desired.
Nice experiment currently backed up by blogging.
The problem is: I cannot find the link to this article anymore, because searches invariably turn up tons of positive articles that all use suspiciously similar wording - kind of as if somebody with an agenda was consciously working on copy&pasting similar texts all over the internet.
At its core, the idea underlying the Wörgl experiment is actually very simple and most likely true: When a monetarily sovereign government isn't afraid of spending, they can do good things.
You don't actually need an artificially value-losing currency for that, you just need the political will for spending.
Vires in Numeris! Long live Bitcoin!
> I got called from paypal because i sold a few casascius coin
Can you link me to the seller policy? I have an app I'd like to sell (no bitcoin involved - except maybe taking it...maybe), and I've been wondering about the seller policy, but couldn't find it.
Unless, can you think of a Bitcoin related non-physical item that is NOT a currency exchange?
An ebook about Bitcoin. (I would consider a digital download to be non-physical)
If that were the case, thousands of ISV, SaaS, indie mp3/ebook vendors etc. would be up in arms already, wouldn't they?
1. I don't see how Bitcoin being sold on Paypal is competition to Paypal. Why wouldn't Paypal love to be a place where people sell bitcoins down the road? Bitcoin is a competitor to money, not to Paypal.
2. I've talked to reps at Paypal who have told me transacting BTC using Paypal or even in apps that use Paypal but transact money in other ways is against their TOS.
This is eBay policy, so papal will have to fall in line.
An example use-case is the Real Estate category.