PayPal Won’t Let You Send Payments That Include Words Like “Iran” or “Cuban” in the Memo
Paying your hired hitman? No problem. Mention Iran? PayPal's gonna need to investigate.
Online money-transfer platform PayPal exists on the internet, which probably means that plenty of quasi- and/or actually just plain illegal things are happening on it every day. In an attempt to prevent the most blatant of these legal transgressions, the platform (and its subsidiary Venmo) implements a system that automatically flags payments that include any of a list of keywords deemed potentially suspect in the memo.
While this safety measure is probably somewhat ineffective assuming anyone using the app for criminal purposes would be unlikely to allude to those criminal purposes in the payment memo, the magazine Jewish Currents recently discovered the system is also pretty problematic after a number of payments to journalists who covered a story on Iran were flagged because that nation’s name was included in the memo.
Nine paychecks of JC staff and contributors are currently being held by PayPal.
— Jewish Currents (@JewishCurrents) February 5, 2020
In a subsequent investigation, Slate found that the incident is representative of a larger pattern in PayPal’s flagging system, discovering that the platform “has a fairly eager trigger finger when it comes to anything having to do with foreign sanctions,” despite a pretty lax attitude toward a variety of other potentially illegal behaviors, including prostitution, human trafficking, weapons and murder.
For example, while words like “ISIS,” “Persian,” and “North Korea” were flagged in Slate’s test, PayPay didn’t bat an eye at arguably more aggressive terms referring to arguably more egregious behaviors such as “weapons of mass destruction,” “assassination,” and “human trafficking.”
“PayPal takes its regulatory and compliance obligations seriously, including U.S. economic and trade sanctions administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC),” the company told Slate in a statement. “Our goal is to deliver as seamless of a payments experience as possible while we do our job in making sure payments made on our platforms comply with applicable law. We realize any delay in making or receiving a payment can be frustrating, and we appreciate our customers’ patience as we comply with our regulatory obligations.”
Slate has a much longer list of alarming terms PayPal takes no issue with, but the main takeaway here is that while you’re more than welcome to pay that hitman his due on PayPal, you’d better keep it on the down low if you want to Venmo your friend for that Cubano you shared at lunch.
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