PayPal is an American Internet banking firm, which operates worldwide. It has recently announced that it will no longer protect transactions that are related to gambling in selected countries Brazil, Canada and the United States.
The Online Gambling History of PayPal
Way back in 2003, PayPal was considered to be the biggest payment processor in the gaming industry. The company was removed from the said industry when eBay bought PayPal because gaming transactions represented some legal gray area. The policies were changed in 2010 wherein the American company started again to accept payments to a couple of gambling sites. A site must be legal and fully licensed in the area in order to receive PayPal support.
Through a statement made by the company, it stated that it will make some changes in its User Agreement and Payment Protection Policy. More particularly, it will include any gaming activity with a prize and an entry fee, such as gambling, in the ineligible items for protection.
For gaming operators, this announcement has a negligible effect because payment processing services such as PayPal are relatively low-risk for poker sites, sportsbooks and online casinos. These are considered to be a smaller risk compared to credit cards because identity theft is not really an issue with these services.
This policy recently released by PayPal will take effect on June 25 of this year, and the mentioned countries above are the ones that are going to be affected.
Other affected businesses
Aside from gambling or any gaming activity with a prize and an entry fee, government and crowd funding payments are also set to get the boot from protection. Actually, the effect of this is serious, especially for crowd funding. Right after June 25, PayPal will not assure the contributions if the project appears to be a scam artist or if it ends without reaching the goal of the funding.
It may be unfortunate for the US, Brazil and Canada to be affected by this change, but there are also a couple of countries that will not be affected at all. This includes UK and other different countries where online betting is licensed and regulated.
As much as possible, PayPal wanted the people to discuss about the new policies that they have made. All the decisions were announced by releasing a new set of terms and conditions. In addition, there was also no real explanation given as to why the firm also stopped guaranteeing payments to government transactions.