PayPal Cut-Off Services To VPN Services

It is not uncommon for many people to make use of unblocking services to get around location blocks. Through the VPN method, they gain access to content that is not readily available in their region. This mostly pertains to legal services such as Netflix, YouTube, BBC iPlayer, Hulu, and other streaming services. No wonder VPN services have undeniably become hugely popular. However, it seems that PayPal has stood itself at a safe distance from the said practices.

PayPal is quite known for its stance against BitTorrent sites and has successfully cracked down on them, as well as Usenet providers, and those that provide file-hosting. The payment processor now apparently has an issue with VPN and so-called SmartDNS services. Well, VPN services might have been next in line though it still came as a surprise, for this decision was a shocking disappointment to VPN and DNS tools provider UnoTelly. Users of both the renowned VPN provider and PayPal are not so happy either.

What PayPal Has to Say

Recently, PayPal started refusing to take consumer payments for the Canadian company which allows almost anyone to browse the internet and freely access websites and services through the ability to bypass geographical restrictions.

PayPal states that they will no longer accept payments on behalf of companies who offer VPN services, due to the reason that they are actually enabling copyright infringement internationally. They say that the decision has been made and implemented only to service their lawful operations, and is deemed an extension of their existing policy.

The online payments system company says that unblocking tools such as VPNs are against their terms of service that fall under their prevailing PayPal Acceptable Use Policy.

Based on this, transactions meant for any kind of device or technological measure that functions to descramble a scrambled work, or does the task of decrypting an encrypted work are included in prohibitions. It can also be one that bypasses, avoids, deactivates, removes, or impairs such technological measure, done without authority that is rightfully given by the copyright owner.

What UnoTelly Has to Say

In an update found on their website, UnoTelly has expressed their side on PayPal’s actions. On February 3, 2016, they state that PayPal severed their processing agreement. It was without prior warning. They apologized to their customers for the inconvenience since they did not have any control over the decision.


UnoTelly founder Nicholas Lin says that they are disappointed with PayPal’s unilateral action, and likewise with the way the company acted without any warning beforehand. He further said that their company provides secure VPN services and DNS resolution and that these serve as network relays which connect people worldwide.

However, it is also pointed out in their website that the SmartDNS service works by removing geo-blocks that have been imposed by different streaming sites. Thus, this allows people to watch the geo-restricted channels wherever they may be. This means it does not matter where you live and customers are assured of the protection of their privacy and location information. This is exactly what copyright holders are naturally opposed to.

An even bigger problem is their VPN services. A virtual private network paves the way for a user to connect to proxy servers or private networks by means of a public network, and the perfect example would be the internet. Their identity remains hidden, transactions are kept at secure levels, and certain restrictions as circumvented. Particularly, the fact that VPN services can be utilized for circumventing geo-blocking, which would arguably fall foul on PayPal’s policy and recent ban.

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The UnoTelly PayPal business account is now limited for good. There is no appeal process for this permanent decision, which has forced them to resort to nothing else but switching payment providers. True, the popularity of Bitcoin and various digital currencies present potentially large-scale payment systems that are fast evolving. Still, the VPN services provider cannot immediately offer an alternative in a snap, and realizes how tough a market this sort of monoculture can be for all kinds of providers. The company’s PR manager Kostas Polichronos states that they are already working on the addition of alternate payment methods apart from credit cards which should be seen in the coming weeks.

PayPal is widespread throughout the globe with currently around 179 million users. One can only imagine the tremendous impact and negative consequences of the cut-off of their services for any company or non-profit organization. UnoTelly is the first affected VPN services provider and it is almost certain that there will soon be more.

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