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As I pointed out in another post, at some point PayPal have taken the decision to block any payment processing for anyone that they consider to be part of a pyramid scam, or even MLM (Multi-Level Marketing) which is a completely legal way of marketing your business. 

That’s their business, and their decision to make, and I don’t think it’s right to criticise them for that.  We all want to run our businesses in our own way, and if a third party doesn’t like it, then they can go and use someone else.  I’m a strong believer in giving people a choice.

However, someone recently emailed me to say that PayPal will also close down accounts of people who they believe are participating in "Get Rich Quick" (GRQ) schemes.

Hmm…

There’s a subtle difference between pyramid and GRQ.  Pyramid is a GRQ scheme, but a GRQ scheme doesn’t necessarily have to be pyramid.

I don’t know why, but I just feel a little bit uneasy about this.  Once someone decides to set themselves up as judge, jury and executioner, then I think they’re on very dodgy moral ground.

I understand that they feel they have a duty to protect their customers, and it’s likely this is a response to demands from customers, but have PayPal overstepped the mark?

Should a payment processor only provide payment processing services or should they also get involved when it comes down to what they see as immoral / illegal practices by other businesses? Or is this even a start to a big clean up in the whole third party payment processing industry?

Mastercard and Visa have recently closed down some third party processors similar to PayPal, due to them not adhering to their standards / guidelines.  Rumours are that 2CO are also in the firing line.  Maybe PayPal are getting a little twitchy that they could suffer the same fate and so are clamping down.

If so, it’s long overdue.  But they have to be very careful not to further tarnish their image by shutting down legitimate business processing for all the wrong reasons.