PayPal Makes a Controversial Decision
Compliance often comes at the cost of user privacy in the financial sector. More often than not, centralized companies are forced to hand over sensitive information to government agencies when it comes to user records and activity. In the Bitcoin world, such news is not uncommon. Most exchange platforms attempt to be fully compliant whenever possible, which means handing over consumer data when requested. This has caused a fair amount of friction in the ecosystem over the past few years, though.
Not surprisingly, such issues also affect payment processors such as PayPal. With its global presence, PayPal is perhaps one of the biggest movers of money around the globe outside of banks and similar financial institutions. The company allows users to link their bank accounts and payment cards to make instant payments on a global scale. While the fees are on the high side, it is a price most people willingly pay for this level of convenience. This situation has attracted the attention of the Canadian government, which was only a matter of time.
In an email sent to business customers and partners this week, the company acknowledged it received an inquiry from the Canada Revenue Agency. It seems the CRA demanded information on PayPal business account holders who received or sent payments between January 1, 2014 and November 10, 2017. The recent cutoff date seems to indicate some suspicious activity has been recorded, although no further specifics were provided in the email.
As PayPal is forced to comply with this demand, the company plans to disclose the demanded information to the CRA. This process is expected to be completed within the next six weeks. It is unclear what the CRA is looking for exactly or what role PayPal transactions may have played. Considering that this popular online payment platform is used on a global scale, it wouldn’t be surprising if some form of criminal activity occurred. After all, there are numerous PayPal phishing websites out there which harvest login credentials to be abused at a later point.
Some users are not too pleased with this decision, which is only to be expected. PayPal appears more than willing to give up the demanded information, even though it has no real choice in this regard. Anyone who is looking for a private global payment solution will not find it in PayPal, as the company will disclose any and all information the government comes asking for. It may be a concern for Paypal’s Canadian business users and partners, but people with legitimate intentions should have nothing to worry about.
This decision by PayPal is in stark contrast to Coinbase’s decision to oppose the IRS request for user information. PayPal has no problem with the CRA request, whereas Coinbase has gone to court to oppose the IRS. Cryptocurrency and digital payments are two very different industries, to say the least. It will be interesting to see what Canada’s investigation brings to light as far as PayPal is concerned. Since no one knows exactly what the CRA is looking for, the outcome remains shrouded in mystery for the time being.
