
PayPal has ceased processing MEGA customer payments - jawngee
https://mega.nz/#blog_33
======
aluhut
Here is the post, for those who don't want or can't load the page:

PayPal has ceased processing MEGA customer payments effective immediately.

MEGA is aware of a report published by NetNames (partially funded from the
MPAA supported Digital Citizens Alliance) that incorrectly claims MEGA's
business to not be a legitimate cloud storage service. MEGA is aware that
Senator Leahy (Vermont, Chair Senate Judiciary Committee) then pressured Visa
and MasterCard to cease providing payment services to the companies named in
that report.

Visa and MasterCard then pressured PayPal to cease providing payment services
to MEGA.

MEGA provided extensive statistics and other evidence showing that MEGA's
business is legitimate and legally compliant. After discussions that appeared
to satisfy PayPal’s queries, MEGA authorised PayPal to share that material
with Visa and MasterCard. Eventually PayPal made a non-negotiable decision to
immediately terminate services to MEGA. PayPal has apologised for this
situation and confirmed that MEGA management are upstanding and acting in good
faith. PayPal acknowledged that the business is legitimate, but advised that a
key concern was that MEGA has a unique model with its end-to-end encryption
which leads to “unknowability of what is on the platform”.

MEGA has demonstrated that it is as compliant with its legal obligations as
USA cloud storage services operated by Google, Microsoft, Apple, Dropbox, Box,
Spideroak etc, but PayPal has advised that MEGA's "unique encryption model"
presents an insurmountable difficulty. The encryption models claimed by
various USA and other entities apparently do not represent any problem to
PayPal or the parties behind PayPal.

MEGA supplies cloud storage services to more than 15 million registered
customers in more than 200 countries. MEGA will not compromise its end-to-end
user controlled encryption model and is proud to not be part of the USA
business network that discriminates against legitimate international
businesses.

Until new payment systems are implemented, MEGA will temporarily not enforce
its storage limits or suspend any accounts for non-payment and has extended
existing subscriptions by 2 months free of charge.

~~~
UnoriginalGuy
For a country which calls itself, non-ironically, the "land of the free" it is
quite disappointing how moneyed US politics and the US justice system is.

It is pretty apparent in this case that a cartel of US companies has some
powerful people in their pockets (namely Senators) and those individuals can
wield their power to shut down legitimate businesses running abroad.

In this case they will likely wind up shutting down a company, but without
even going through any kind of court. Since the last time they spent millions
on Megaupload going through courts, and still got nowhere (since their whole
case was baseless).

~~~
Fuxy
American justice is blind to everything except money.

Didn't VISA Master Card and Paypal get fined for blocking wikileaks recently?

Isn't this just about the same thing?

~~~
fnordfnordfnord
>Didn't VISA Master Card and Paypal get fined for blocking wikileaks recently?

Yeah, in Iceland. [http://www.wired.com/2012/07/wikileaks-visa-
blockade/](http://www.wired.com/2012/07/wikileaks-visa-blockade/)

~~~
gcb0
and applauded everywhere else...

~~~
TeMPOraL
And also DDoSed at the time.

------
sschueller
This selective banning should be a concern in general especially with such
monopolistic corporations like VISA/Mastercard.

Are there no regulatory requirements to force VISA/master card to accept
payments as long as the business is not illegal?

Does anyone remember when donations to Wiki leaks got frozen?

~~~
nathanb
Forcing someone to accept payments is the other side of the same coin.

I don't want my government to strongarm credit companies into refusing to
process payments for politically troublesome customers. But I also don't want
my government to strongarm those same companies into processing those
payments.

If anything, this is just a wakeup call that the credit duopoly have more
power than we realized.

Kim Dotcom is nothing if not resilient. It is morally and ethically
complicated to root for him in every aspect, but I fully expect him to come up
with a clever solution to bypass this duopoly in a way that the average user
can accept. I don't know if there's any question for which Bitcoin is an
unqualified right answer, but this may be as close as I've seen it come.

~~~
moe
_But I also don 't want my government to strongarm those same companies into
processing those payments._

So VISA and Mastercard should be allowed to reject customers at will?

~~~
kefka
No.

If they are allowed, how is the criteria selected? Are you(payment industry)
going to stop payments for the following:

Atheist groups? Islamic non-terrorist groups? Foreign countries you don't
'like'? Libertarians/Greens/Socialists/Communists? Non profits you don't like?
Church of Satan donations?

They have a monopoly over the bulk of commerce, as does PayPal. And they act
as a cartel, de-facto banning whatever they disapprove of. In other words,
having them strongarm businesses is killing their connection to the market.

~~~
eli
With the exception of discriminating against certain protected classes,
American companies are generally free to decide who they want as a customer
and who they don't. You don't have a right to credit card processing any more
than you have a right to eat at a fancy restaurant or hire a developer --
imagine if contract developers weren't allowed to turn down clients.

~~~
nitrogen
There is the concept of legal tender, which creditors are required to accept
as payment of debts (it's printed on US currency). We need some kind of
electronic payment equivalent.

[https://en.wikipedia.org/wiki/Legal_tender](https://en.wikipedia.org/wiki/Legal_tender)

~~~
icebraining
How would this help? Visa, Mastercard and Paypal aren't the creditors here.

~~~
nitrogen
Obviously the rules and parties involved would be different for an electronic
equivalent to the concept. I'm sure you can figure out the rest.

~~~
icebraining
It has nothing to do with electronic. Visa isn't the creditor, so legal tender
laws wouldn't apply even if they were carrying physical bills.

~~~
nitrogen
You are thinking too literally. An electronic legal tender must necessarily
have an electronic means of conveying it. That may not be Visa, but the means
of payment would be just as essential to the concept as acceptance of payment.

~~~
kefka
I wouldn't put too much credence on the US government to figure this out in
any sort of timely manner. There's plenty of areas in our country which are
years behind in terms of governance, policy and societal effects.

They're still playing the game "if it's an internet technology, the
Constitution doesn't really apply".. So to see if they could wrap their heads
around an internet based currency is pretty much a joke.

And then I think, how did the FCC decision pass? Bureaucracy. It's not the
Legislative/Executive/Judicial.

------
artursapek
Man, why does Kim insist on all the special effects? I've never seen a blog
post take so long to load.

~~~
Gracana
6.8MB page load. More than half of the 168 requests were for javascript files.
The largest file was a 620kB (23k line) stylesheet.

Those are some pretty wild numbers.

~~~
moe
For a whopping 2.6kb of text.

Someone really ought to fire their webdesigner...

~~~
aw3c2
I wouldn't be surprised if Kimble made it himself. He's 31337.

------
gygygy
This is why I desperately hope bitcoin would one day get adopted by the
masses.

------
smtddr
Here's where coinbase could make an interesting feature.

Coinbase QuickPay

A dropdown of popular companies. Select the one you want then enter the amount
you want to pay this company in USD. A confirmation screen comes up asking you
_" Do you really want to pay $X dollars to $COMPANY ?"_ You select "yes", and
from there coinbase does whatever it takes to transfer that value to that
company. Completely hiding any concept of bitcoin. Of course, you'd have a
QuickPay transaction history screen where you could select "Technical Nerd
Details" on a transaction and see all that bitcoin stuff; but initially the
transaction history will look just like your bank's transaction history.
Showing just the companies, dates, USD amounts. I guess there needs to be some
kinda one time email-verification between the merchant, coinbase and costumer
at the beginning to prove which payments are coming from who. Coinbase would
have to put metadata on the transaction; like maybe a hash of the email
address or something that $COMPANY could verify on their side.

Then I guess USgov gets banks to cease processing ACH from coinbase.....

~~~
nathangrant
Even if Visa and others would allow this approach, it would still really limit
Mega's ability to get funds to the point where its not a viable business I
would think.

------
mysteriouswasp
for those who dont want to download >5 megs of assets, I took the content and
put it on pastebin.
[http://pastebin.com/FBEjGTqV](http://pastebin.com/FBEjGTqV)

~~~
Huselp
Chrome's developer tools says "1.9 MB transferred" when loading the MEGA page
with cache disabled. On the other hand, it says "7.1 MB transferred" when
loading your Pastebin link.

------
Joona
What other, user-friendly payment providers are there for MEGA to use?

Edit: Ask HN: Paypal alternatives for vendors outside the US?
[https://news.ycombinator.com/item?id=9123336](https://news.ycombinator.com/item?id=9123336)

------
RexRollman
So what's next? The banning of payments to VPNs?

~~~
falcolas
Given the following quote:

> a key concern was that MEGA has a unique model with its end-to-end
> encryption which leads to “unknowability of what is on the platform

It's not outside the realm of possibility.

~~~
narrowrail
Everyone seems to be taking Mega's statements as truth without question at
all. Banning payment to VPNs would severely cripple lots of businesses in the
U.S. and around the world. I don't believe it's a possibility, _at all._

~~~
forthefuture
I don't know the current levels of VPN usage, but I'd seriously doubt that
there are any industries at all that rely upon people using someone else's IP.
Using a VPN to get around content blackouts / licensing agreements in your
country is not legal, so I'm sure you don't mean that.

~~~
DanBC
> but I'd seriously doubt that there are any industries at all that rely upon
> people using someone else's IP.

A VPN is not a proxy.

Plenty of businesses rely on VPNs to keep their staff communications safe when
those staff are working away from the office. This is not an unusual or weird
requirement only used by the security paranoics -- it is everyday standard
practice.

[https://en.wikipedia.org/wiki/Virtual_private_network](https://en.wikipedia.org/wiki/Virtual_private_network)

> A virtual private network (VPN) extends a private network across a public
> network, such as the Internet. It enables a computer or network-enabled
> device to send and receive data across shared or public networks as if it
> were directly connected to the private network, while benefiting from the
> functionality, security and management policies of the private network.[1] A
> VPN is created by establishing a virtual point-to-point connection through
> the use of dedicated connections, virtual tunneling protocols, or traffic
> encryptions. Major implementations of VPNs include OpenVPN and IPsec.

~~~
Dylan16807
That's an internal VPN though, not a service with customers.

~~~
DanBC
There are plenty of services with customers that cater to small businesses who
don't have the staff to set up and run their own software.

A websearch for business VPN returns dozens of providers for businesses.

------
jMyles
I think bitcoin sucks for a number of important technological and
philosophical reasons, but when people ask what its killer features sure: this
is one of them. And it's hugely important and hugely needed.

~~~
poopsmithe
plz enlighten on these tech and philosophy reasons?

~~~
commandar
An offhand tech+philosophical reason would be the environmental impact of
bitcoin mining.

~~~
MildlySerious
Do you have any reason to assume that the infrastructure of banks is frendlier
to the environment than Bitcoin mining is? The required logistics for
thousands of buildings to be safely supplied with new fiat, the manual labour,
enforcing security etc are probably way more demanding already.

Now add the whole high frequency trading thing and all the efforts that
surround it on top of that and we are probably good for another few years
before Bitcoin mining is even worthy of being mentioned. Until then, I don't
see we wouldn't have worked out a better proof of work system that's more
friendly to the environment, should this really become a concern.

~~~
shit_parade
The air conditioning footprint of bank branches alone is going to be several
magnitudes greater in terms of energy consumption than bitcoin mining, add in
commuting hours for every bank employee and it isn't even a contest, people
just parrot whatever news source they like without thinking, even people on
HN, it is really very sad.

~~~
commandar
Banks serve function far beyond mere transfer and holding of currency. Last I
checked, the blockchain infrastructure doesn't e.g., issue mortgages.

------
simonblack
VISA, Mastercard and SWIFT have damaged their own brands by showing themselves
not be neutral but controlled politically. By not being neutral, it shows they
cannot be trusted and dependable for all users.

Other entities will arise that _are_ neutral around the world and will replace
VISA, mastercard and SWIFT.

~~~
MBCook
> VISA, MasterCard and SWIFT have damaged their own brands...

Do you honestly think anyone outside HN and other very tech heavy crowds knows
about this? Do you think they'd care?

If this has done anything (and I kind of doubt it) I would say it's helped
them politicaly a little tiny bit.

~~~
TeMPOraL
Indeed. The only other political action by VISA and MasterCard I remember is
them blocking payments to Wikileaks, for which they were rightfully subjected
to a global DDoS attack.

------
beshrkayali
“unknowability of what is on the platform”. What's PayPal got to do with that
anyway, considering that they admit the business is legitimate?

~~~
mike_hearn
It doesn't matter that the business is legitimate.

The US Treasury has almost unlimited power to fine or imprison people who move
money on the flimsiest of pretexts - and they use it. Look up "Operation
Chokehold" for an example but there are many more.

PayPal is attempting to insulate itself from political pressure that can be
brought to bear on them in future if they continue to serve Dotcom (and/or
their banking partners). Nothing more complex than that. Rule of law does not
apply in the banking world.

~~~
beshrkayali
I'm not sure what's Mega's involvement in moving money here, or maybe I don't
get it. It seems more of not-being-able-to-bypass-encryption issue which is
probably more alarming, since I'd infer that, if the US Treasury is the entity
putting pressure on PayPal, then who's putting pressure on the US Treasury?

------
howeyc
Interesting they call out other services the USA is okay with that also
provide encryption. I believe all the other services the provider can access
the data.

Except maybe SpiderOak.

~~~
ryan-c
Crashplan also has client side encryption, though the security of it is a
little questionable (I cannot elaborate for legal reasons).

------
driverdan
PayPal continues to show how shitty they are. Stop using them!

To people who work there, why? How can you continue to work for an
organization that does things like this?

~~~
GigabyteCoin
> PayPal continues to show how shitty they are. Stop using them!

I really wish I could...

When I created my SaaS a few years back, I went all out with payment
providers.

I registered and implemented every single form of online payment I could find.
PayPal, AlertPay, PayPay, MoneyBookers, LibertyReserve, Bitcoin. You name it,
I made that form of payment available. I even accepted money orders via snail
mail.

In the ~2 years I gave all of the "other guys" a chance, 99.9% of my payments
came via PayPal.

I received 1 money order. Perhaps 3 people paid via LibertyReserve. 0 payments
from all of the other providers mentioned. And over 5,000 payments via PayPal.

Unfortunately, there is no other option if you want to sell stuff online.

And this is coming from one of Bitcoins biggest proponents.

~~~
bdcravens
Stripe?

~~~
GigabyteCoin
They weren't available in my country when I started up.

They're probably somewhat of an option today, sure. But I suspect they'd still
only garner 10-20% of sales at best. First mover advantage and all that...

------
venomsnake
Can't we classify banks as Title II utilities? They use a lot of
telecommunication services.

~~~
Selfcommit
There is something funny about considering banks to be dumb pipes through
which money travels.

~~~
venomsnake
Well banks are too smart for the good of the society right now. I would like
some form of Glass Steigl updated for the modern age that splits the banks in
two parts - the utility - facilitating movement of money and the commercial
part. The utility will be common carrier.

------
junto
PayPal, Visa and MasterCard are slowly piping custom to altcoins though. I
guess that is a good thing.

------
xacaxulu
America on the wrong side of history....again. Yawn.

------
marcoagner
It's time for plan B :)

------
tzakrajs
Smells like bullshit to me...

------
higherpurpose
As someone was saying on Twitter, you can legally buy guns in US, but end-to-
end encryption is a big no no, because end-to-end encryption is
umm...dangerous? It reminds me of another stupid law meant to ban body armor.

~~~
woodman
Not with Paypal you can't, they'll shutdown your account for anything firearm
related.

