Geek On The Hill

I Didn’t Ask to be Caught Up in Paypal’s Political Shitstorm

And yet here I am.

Just for the record, let me make it clear that in my 20+ years of having a PayPal business account, I have never had a problem with PayPal. Their job is to collect payments and move money, and they’ve done that very well. I’ve had no problems with PayPal.

Neither has PayPal ever had a problem with me. PayPal has gone more than two decades without screwing up one of my payments; and I’ve gone more than two decades without a complaint, dispute, or chargeback.

It’s been about as warm and fuzzy a relationship as two businesses can have.

At least until a few weeks ago, that is.

What happened was that a few weeks ago, PayPal published (and immediately walked back) an update to their terms of service which said that they could fine account holders USD $2,500.00 for distributing “misinformation.” You can read more about it here, here, and here in case you haven’t heard about it.

I basically yawned when I read the update itself because other than on this blog, which I rarely touch, I don’t really say much. I get paid to bang out code, not to spew political diatribe. But in the bigger world outside my window, it triggered a shitstorm, especially among people on the political right.

Some of my own clients were very unhappy about it. A few informed me that they were closing their PayPal accounts and would need some alternative way to pay their bills. Others just let me know that they were unhappy. That was their way of tellig me that they, too, wanted an alternative. If that weren’t the case they wouldn’t have told me they were unhappy.

Consequently, despite my 20+ year happy relationship with PayPal, I was drawn into the partisan political shitstorm that they’d created. My clients wanted an alternate payment method. That meant that I had to offer another payment processor as an option if I wanted to keep those clients.

In terms of time and effort, it was no big deal. These accounts are easy to open if you have decent credit, and the implementation consisted of plugging some information into my invoicing system. It took about an hour, start to finish.

I suspect that my relationship with the new processor will also be a happy one. Payment processors in general love merchants who don’t get complaints. We give them warm fuzzies. The new processor’s fees are also slightly lower than PayPal’s, so there’s that. I’m sure we’ll become good friends over time.

The problem is that I feel a bit as if by making a new friend I’m drifting away from an old one.

In addition to being one of the few businesses with which I have never had a problem, PayPal is also one of my oldest business relationships. They were there when I started my business and they helped me grow it. On a technical level, I also like their flexibility and implementations. PayPal is easy to develop around. So in most ways except for their recent (and hopefully brief) foray into politics, I like PayPal.

In the end, however, when my customers decide to boycott PayPal, I have no choice other than to give them an alternative payment method. Money talks. Bullshit walks.

What’s most frustrating about this situation is that the bullshit is of the political variety. PayPal has pulled off the dubious achievement of managing to piss off people on both sides of the political divide. Their original reference to “misinformation” triggered the right, who interpreted it as censorship of conservative ideas; and their walking it back triggered the left, who considered doing so to be cowardly and an endorsement of “hate speech.”

Far removed from the controversy, but still affected by it, are those of us who try very hard to keep our political opinions as far removed from our businesses as possible. We believe that there’s no upside to alienating half of our potential customers, so we try very hard not to do it. We just sell whatever it is that we sell and keep our mouths shut about our political beliefs.

For those of us in that group — and we are legion — the controversy surrounding PayPal also gives us pause to wonder whether and to what extent the exodus and the boycotts may affect PayPal’s liquidity and, therefore, their essential viability. That’s an important thing to consider in a company that handles your money.

Google Trends during the controversy shows spikes in queries such as “paypal alternatives,” “close paypal account,” and most ominously, “is paypal in trouble?” There also are simultaneous spikes in searches on PayPal’s competitors such as Stripe and Square.

That can’t be good news for PayPal. Clearly businesses are looking for alternatives.

I suspect that many businesses (such as my own) just need ways to accommodate customers who are boycotting PayPal. In other cases, the business owners themselves may be boycotting PayPal. Still others probably just want a fallback in case the controversy affects PayPal’s solvency.

In the end, however, it doesn’t really matter why businesses are looking for alternatives. What’s bad news for PayPal is that they are looking.

For what it’s worth, I hope PayPal comes through this okay. I haven’t closed my account. I still accept PayPal payments from customers who want to use it. In fact, I’ve received notices of PayPal payments while writing this article. PayPal runs a convenient service, and I hope they pull through this shitstorm with lessons learned and no permanent harm.

In order for that to happen, however, I believe that PayPal has to do one thing that’s worked well for me throughout my business life: They need to stay the fuck out of politics.

They really have no other option. This nation is divided along partisan political lines such as I’ve never experienced in my six decades on this earth. Even alluding to political positions is guaranteed to cost a company money.

There’s no upside to alienating half of your user base.

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