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PayPal’s ‘misinformation’ misfire and what it means for finance

October 10, 2022, 1:10 PM UTC
A sign is posted in front of PayPal headquarters on February 02, 2022 in San Jose, California.
PayPal headquarters in San Jose.
Justin Sullivan—Getty Images

It was a quiet weekend—unless you were PayPal. The payments and crypto giant, which also owns Venmo, got lit up on Twitter over a Friday news report that the company planned to fine users up to $2,500 for promoting “misinformation.” By Saturday, the likes of Elon Musk and David Marcus—both members of the so-called PayPal Mafia—had piled on, and by Sunday #DeletePayPal was trending.

So what the hell happened? PayPal responded to the controversy by stating that an update to its Acceptable Use Policy, which also includes strictures against violence, nudity, and so on‚ had gone out in error, and that the company “is not fining people for misinformation and this language was never intended to be inserted in our policy.”

It looks, in other words, like PayPal’s legal team indeed was noodling on the idea of debiting money from customers’ accounts if they violated certain company policies, but decided not to go forward with it. Or else the company changed its mind after someone leaked the draft language to conservative media. We’ll never know for sure.

In any case, this feels like good intentions gone awry. I’m guessing that instead of passively tolerating a flood of garbage on its platform, some at PayPal proposed doing something about it—including the introduction of a financial penalty for the worst offenders. This wouldn’t be such a bad thing. After all, who cares if PayPal decided to hit blatant charlatans—purveyors of quack cancer cures, say, or those fundraising off “stop the steal” nonsense—with a modest financial penalty?

The problem, of course, is that not everyone’s definition of “misinformation” is the same. People can disagree in good faith on controversial topics, and companies like PayPal should not be in the position of punishing those with unpopular views by taking their money. In any case, it’s a moot point since PayPal has made clear it’s not going forward with such a plan. The bigger issue here is that fintech and crypto companies are no longer viewed as simply payment rails, but are getting dragged into the same thorny policy problems as social media companies. Welcome to the culture wars, PayPal.

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

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