Leaked PayPal AUP Rattles Retail Investors
We’ve all used it at least and some more than others. An early bird to the world of FinTech, PayPal once cornered the market for online payments but now shares the space with many other companies like Affirm and Chase’s Zelle. While providing assurances of protected, secured, and encrypted payment processing, it appears under the hood PayPal has something to hide. Let’s dive in.
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PayPal. This past Friday PayPal’s latest Acceptable Use Policy leaked online, and its contents set the internet ablaze. Notably, PayPal has the intentions of imposing financial penalties on customers who violate this new policy. The financial penalty… $2,500 for any and all misinformation about the company. Simply put, you the customer and user of PayPal services, if found guilty of multiple acts of misinformation, will be fined $2,500 per instance.
“You are independently responsible for complying with all applicable laws in all of your actions related to your use of PayPal's services, regardless of the purpose of the use," the document, called "Acceptable Use of Policy," said.
“Violation of this Acceptable Use Policy constitutes a violation of the PayPal User Agreement and may subject you to damages, including liquidated damages of 2,500.00 U.S. dollars per violation, which may be debited directly from your PayPal account(s)," the company added.
This AUP was purportedly to go into effect sometime next month based on the memo being marked, “Last Updated on November 3, 2022.” Today is Sunday October 9th, 2022, and this memo was last updated in the future. Already a shady move on behalf of PayPal. The company is already having a string of problems. Its stock price has fallen 52.2% since January. The market value has decreased by nearly $114 billion during that period to $104.3 billion.
The FED’s ongoing war on inflation is also taking its toll on the company. The aggressive increase in interest rates by the Federal Reserve is leading to a slowdown in economic activity… activity that the company directly benefits from. Since the company’s core source of income is the fees, they charge consumers to use the platform, when the volume of transactions decreases, so do PayPal revenue.
Let’s not forget about crypto. Crypto as a whole has shed billions of dollars in value. How does this correlate with PayPal? Well, the company was one of the first to offer to buy and sell Bitcoin and Ethereum. Crypto peaked in November of last year and since then has pretty much survived on fumes. This disinterest in trading crypto has led to a sharp decline in trading volume and the withdrawal of retail investors.
So, PayPal has enough on their plate. To go and create another headache for themselves is bewildering. Co-Founders Elon Musk and David Marcus agree saying the new policy goes against everything they believe in.
The company has since issued a statement after a crescendo of criticism cascaded on them. PayPal said the new policy information was an error.
"An AUP [Acceptable Use Policy] notice recently went out in error that included incorrect information," a PayPal spokesperson said in an emailed statement. "PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy. Our teams are working to correct our policy pages. We’re sorry for the confusion this has caused."
The only error I see here is that the memo leaked before implementation. As a regular consumer I find it hard to believe that a future dated AUP included “incorrect information”. I wholeheartedly believe that
