PayPal’s Apology On Policy Change Insufficient And Too Late?
PayPal vowed to punish users who disseminated “misinformation,” but a massive response prompted the business to reverse course.
In the previous week, PayPal generated quite a stir when it sought to both censor and intimidate its users. According to reports, the board and management decided it a good idea to change their Acceptable Use Policy (AUP) and publish text indicating that users would be penalised $2,500 for each instance of distributing what PayPal believed to be “misinformation.”
Even though it was the weekend, the response was swift, leading the corporation to hastily retreat. PayPal attributed it to “incorrect information,” he told the reporters.
“PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy.”
The harm had already been done by that point. PayPal has not only separated itself from erstwhile competitors, but also from consumers and investors. Although it is impossible to determine which answer was the last straw for PayPal, we can surely attempt.
When “bankruptPayPal” began trending on Twitter, it was one of the first indications that things had gone poorly for CEO Dan Schulman and his board. According to TweetBinder, the hashtag received 59,544 tweets, the majority of which were submitted on 8 October.
That was impressive, but it was just the beginning.
On the same day, ex-PayPal president David Marcus moved to Twitter to voice his displeasure with his former employer, increasing the pressure on the corporation. The internet entrepreneur, who is a Facebook/Meta alumni, tweeted:
It’s hard for me to openly criticize a company I used to love and gave so much to. But @PayPal’s new AUP goes against everything I believe in. A private company now gets to decide to take your money if you say something they disagree with. Insanity. https://t.co/Gzf8faChUb
One of the approximately 14,000 people who retweeted his message was crypto influencer Udi Wertheimer, who said that PayPal’s decision to restrict users seemed “to go against what used to be the basic aim.”
Elon Musk weighed in as well. Musk, co-founder of the PayPal platform (at the time, an online bank known as X.com), simply answered, “Agreed.” One of Musk’s key objectives for purchasing Twitter is to promote free expression.
The Consumer Financial Protection Bureau allegedly described PayPal’s conduct as “new territory.”
If this did not persuade Paypal that it had lost its way, the writing was on the wall. Users and investors deleted their accounts and sold their shares, following the trend. According to Sky News Australia, in only two days, PayPal’s cancellation website garnered close to 100,000 hits. However, this is insignificant compared to the 400 million user accounts on the payments network.
On October 10, investors greeted the stock with a sell-off, resulting in $8 billion being wiped off its market capitalization and an 8% decline in shares to below $90, where PYPL has remained since.
With a market capitalization of $97 billion, PayPal is not going away soon. However, if it wants to salvage its soiled image, it may prefer to stick to what it does best: payments.
