Paypal Sues Google Over Trade Secrets (Google Wallet)

Paypal was already under siege by startups like WePay and Square, but with Google announcing the new Google Wallet platform powered by NFC, it now has a very major competitor in the mobile payments segment.

Today, Paypal announced that it had filed a lawsuit against Google and Osama Bedier, the former VP of Platform, Mobile at Paypal who now works at Google.

Apparently, Bedier was heading the charge for Paypal’s new mobile payments offering, in which Google would be partnering with it. What happened was, Google poached Bedier and dropped those negotiations, instead launching its own mobile payments offering.

Paypal is now alleging that Bedier misappropriated trade secrets from Paypal, to help build Google’s offering. Paypal says that it was working on the lawsuit since Bedier quit, but it seems that Google’s mobile payments announcement may have triggered it, and with good reason – the mobile payments market is expected to reach $630 billion by 2014. Paypal will definitely try to keep Google from getting a huge head start.

Google has tried to compete with Paypal before, in the form of Google Checkout, but failed badly. This time around, it does seem to have a great offering. Also, Paypal hasn’t really entered the mobile payments arena yet, so Google may have a really good chance of dominating the segment.

I expect Paypal to soon make an announcement about its mobile payments offering. Whatever happens to the lawsuit, having two competing giants in the space is definitely great news for the consumers.

PayPal unfreezes Bradley Manning Support Group Account

PayPal is obviously trying to rejuvenate the battered image it now has in the eyes of the world after the entire Wikileaks debacle. PayPal had earlier suspended the accounts of customers who had donated to whistleblower website Wikileaks right after Cablegate. Their feeble reasons as to why the accounts were suspended were overshadowed by the rumors that the United States Government had wrung PayPal’s arm to perform this action. Some of these accounts were also involved in working for Pfc. Bradley Manning the inside man who, many claim, was responsible for the leak of the top secret cables.


One such organization called Courage to Resist also had its account recently suspended by PayPal. Branding PayPal as Evil, the press release by Bradley Manning Support Network claimed that it was and internal policy decision by PayPalto shut down Courage to Resist’s PayPal account, and that the company by their own admissionsaid that there was no legal obligation for them to close down the account.

PayPal, facing severe backlash, retracted their suspension instead saying that Courage to Resist did not comply with their stated policy for non-profits require that the organization have an associated bank account. This is part of the Know Your Customerobligation. In their blog post, PayPal said that they lifted the ban because now they sufficiently know their customer:-

Upon review, and as part of our normal business procedures, we have decided to lift the temporary restriction placed on their account because we have sufficient information to meet our statutory Know Your Customer’ obligations. The Courage to Resist PayPal account is now fully operational.

PayPal for iPhone Now Supports Fundrazr

PayPal has just updated it’s mobile app to include support for Funrazr; a social fundraising solution which provides users with an easy way to raise funds using your PayPal and social networking accounts. The new feature also allows users to share the Fundrazr campaigns with friends.

PayPal Funrazr

In addition to creating new Funrazr campaigns, users can also track the donations against the goals you have created and also monitor all the campaign progress from your phone itself.

PayPal 3.2 for iOS also includes new feature which allows you to reorder your favorite PayPal mobile features in the app allowing you easy access to features such as PayPal local, mobile check capture and other features. You can download the latest app from the app store or use the app store to update your existing app.

Micropayments and Friending Facebook Looks Good For PayPal

A micropayment is the best method of getting users to pay. It is easier, faster and can be integrated into any service so well, users might just think it is a part of the service. It is seen that micropayments for a part of a service pays off better than paying for the service itself (look at all Facebook’s social games).

Facebook still has scope for a better micropayment service and PayPal just filled the void with its PayPal for Digital Goods.


The new solution from PayPal is a two-click process and does not even need you to leave that page. It was hinted in October last year. At just 5% + 5 cents for payments under $12, the payment service is charged at a minimal cost. This payment for micro amounts looks cheap and has huge conversion rates from users.

The PayPal labs defines this process as,

Save big with PayPal’s micropayments price – designed for merchants who process low-value transactions (typically under $10 in value).
Sign up for micropayments pricing and you’ll get the 5% + 5c rate with all of PayPal’s payment solutions, like Buy Now buttons, Express Checkout, Website Payments Pro, Send and Request Money (learn more about our different payment solutions )

PayPal outlines the payment scheme as,


According to PayPal, this payment process is the:

online equivalent of dropping a quarter in the slot to buy a newspaper or play a video game.

With a lineup of big-shot partners like  Facebook,,, GigaOM and Ustream, the new payment scheme is on a perfect launchpad.

Why Is PayPal Screwing Indians? An ex-RBI Employee Tells Me The Facts

So as you already know by now, PayPal is busy screwing small Indian SMBs and independent freelancers who rely on the service to send and receive payments. This is definitely not the first time this has happened, and will definitely not be the last one.

In a recent email and blog post, PayPal said that they will be restraining Indian users from using the money in their PayPal account to purchase anything along with putting a stipulation that they have to withdraw the money within 7 days. In addition to that, they have also said that Indian users cannot accept payments more than $500.

Many users have been blaming the Reserve Bank of India (RBI) for this, but most of them haven’t done any fact-checking as such and are just blaming it because they feel that PayPal has no faults whatsoever. So I sat down with one of my roommates who has been an ex-RBI employee who has worked with them for 7 years to understand why this is happening.

Let me take you through this. First of we take a look at why PayPal cannot keep your money with them for more than 7 days and then delve into the $500 restriction they will be putting into place. Here is the actual conversation edited in some form by me without changing the details.

Me: So PayPal says that they cannot keep the money in their account for more than 7 days? Why is this happening.

RBI-expert: Because if PayPal keeps the money with them, they have to be regulated as a bank (and any institution that does it have to do the same) and PayPal does not want that to happen. Any entity which provides on-demand payments have to be regulated as a bank as per RBI rules, this is mandated because if they hold money for more than 7 days they have to provide users with interest. With this new change PayPal is basically circumnavigating this regulation so that they don’t have to answer questions to any government about how they conduct business and why they charge an exorbitant amount to customers to accept payments whilst continuing to not giving users interest like every other bank in India does.

Me: So you are saying that PayPal is practically f*cking all Indians.

RBI-expert: No I wouldn’t say that, but I would say that their business heads know how to circumnavigate against a country’s policies and that they are adamant about accepting regulations because that would mean that they have to cut down on their charges and also ensure that they do follow all guidelines laid down for a bank.

Me: Ok, so I see that they are screwing their customers with a hefty fee and now this. I do understand that they want to make money, but what is about $500 transaction limit.

RBI-expert: Well, once again this is a government and RBI mandated thing. All entities who bring cash-flow into India have to basically report transactions above $500 to the RBI and government. PayPal is basically just circumnavigating around this mandate by restricting the payments to $500. Once they do this, they have no obligation to report it to the RBI or the Indian government.

Me: So you are basically saying that these new changes by PayPal is just about screwing the RBI, Indian Government and people who use their service.

RBI-expert: Well, these are the rules. I will simply say this. If PayPal accepts the RBI regulations they have to be treated a bank and I can see that they are hell bent on not doing it. They are basically finding ways to get over it because once they become a bank they come under a different set of rules. Right now PayPal is a monetary service but they are not like say SBI, ICICI, HSBC or Citibank and do not have to adhere to the rules. Once you become a bank, you have stringent rules which I don’t think PayPal wants to follow.

So as you can see, from the above conversation which came through from a horse’s mouth, I feel that PayPal is basically cheating the RBI, Indian government and Indian users because they don’t want to be regulated. All I can say is that we need to boycott these services, check out some PayPal alternatives.

Though these things may make my statement that RBI is in no fault at this sound untrue, but you have to understand that these rules have been in place in 2004 and some of them since 1999. So saying that RBI is screwing PayPal is basically wrong. PayPal has been floundering these rules since they came into India and the RBI is just reining them in. They might have given them an option to change to being a bank or stop flouting the rules laid down by the Government of India. I believe you will understand what PayPal chose to do.

PayPal has also been blocked or regulated in countries such as Japan, Brazil, USA among others. Some of these countries have put in similar restrictions on in place which were also done last year in India. So it does not really make sense to say that RBI is the only one who is regulating PayPal.

This post has been updated with additional inputs and facts.

PayPal Alternatives For Indians

If you are an Indian and have been screwed by PayPal, you do not have to stick with them. There are several other ways to get your money from foreign companies without having to be a victim of their stupid policies and lack of rules in India.

To find out a different solution, you can visit this Wikipedia page which lists provides a huge list of service providers who are PayPal alternatives and also allow you to accept online payments.

In addition to these I also suggest you to take a look at and which provide an easy way to send and receive money online.

Though not all of them may work in India, these solutions are definitely 100 times better than PayPal. If you want to add to this list please feel free to comment on this post.

So PayPal Practically Screws Indians Again

If you want to get behind the history of me and PayPal, you better head over and read this older post rant of mine. PayPal has been and is being screwing people in India because they basically cannot adhere to standards laid down by the Reserve Bank of India.

In a recent email sent out to PayPal users in India, they have said that they will be laying down new rules for Indian users starting from March 1st, 2011. Here are some of the highlights, you can read the rest here.

In order to comply with the RBI Guidelines, our user agreement in India will be amended for the following services as follows:

  1. Any balance in and all future payments into your PayPal account may not be used to buy goods or services and must be transferred to your bank account in India within 7 days from the receipt of confirmation from the buyer in respect of the goods or services; and
  2. Export-related payments for goods and services into your PayPal account may not exceed US$500 per transaction.

So PayPal is practically telling Indian users that they cannot buy anything from their money in PayPal and instead have to use their "f*cked up" exchange rates so that you lose money and then pay a "premium" on exchange rate conversions when you buy things from out of the country.

In addition to that they are telling developers and web designers that you cannot earn more than $500 per transaction. Now try explaining to your clients that they will need to take the effort to send you money in multiple transactions.

Alright, I am not going to go on with this humbug, please continue for me in the comments.

Please don’t blame the Reserve Bank of India (RBI) for this. For the record, here are the FEMA regulations (Foreign Exchange Management Act, 1999)  which clearly state how businesses like PayPal should operate in India, and PayPal is definitely one of the biggest violators of it.

More PayPal shenanigans at their official blog. At least they didn’t f*ck royally when it comes to intimating users.

Is PayPal Freezing Accounts that Donate to WikiLeaks?

Earlier today, at, a person by the nickname HelloKevin11 posted the following thread.

Paypal shut my account today because my business donated money to wikileaks.

I go to log into my business account, and it’s locked. The girl on the phone told me it’s because my account handles a large amount of money (it’s a biz account), I recently sent a lot of money ($4000) overseas, and I also sent money to wikileaks. My account is being investigated for illegal activities and I have to account for what the money was used for. They want invoices and such …

wikileaksWe’ve covered many topics about WikiLeaks in the last few months. We’ve also posted plenty of stories about problems with PayPal accounts. However, this one might potentially impact the most internet users. I have not been able to confirm that this is the truth yet, but if it is, I have to ask this question.

Is PayPal an instrument of the United States’ war on terrorism?

Does any user of PayPal now have to worry that big brotheris watching over their shoulder as they buy and sell products online? How far does the reach of the US State Department extend? Will people in France, England and India have to worry about their accounts being frozen? What charitable causes will be targeted next? Can I safely donate money to the Electronic Frontier Foundation?

HelloKevin’s post already has nearly 1000 comments. The comments are ranging all over the map, with most of them containing at least a hint of outrage. According to Kevin, he’ll be contacting PayPal by phone on Monday to ask for a verbal explanation. He intends to record the conversation.

Until then, all we have are lots of unanswered questions.

Breaking: 4Chan Anon Takes Down

Updates at the bottom

4Chan’s Anon has finally taken down PayPal over their fiasco. This is getting really bad today and lot of sites have been taken down.


Currently is completely down as you can see from the screenshot above. Earlier today the PayPal blog was taken down after they blocked payments to Wikileaks, PayPal has claimed that no-one had contacted them to stop payments to Wikileaks.

Earlier today 4Chan members had also brought down MasterCard, A Swiss Bank and Visa websites through DDoS attack. Both and  suspended Anon accounts earlier today, making this battle even more prolific. When this battle will end is not certain, but Wikileaks has definitely take a new twist altogether.

PayPal Down

Update: looks to be down even after an hour. Down for me or Everyone also confirms the same.

Update 2: Only seems to be down, seems to be working fine. If you type in your browser it does not work, if you type it works Ok. Thanks @hp_lifelive.

PayPal Says US Department Did Not Contact Them About Wikileaks

Looks like PayPal is playing a safe game. After suffering a DDoS account on their blog by 4Chan Anon members, PayPal has now come up with a new blog post explaining on why they blocked the Wikileaks account.

The account was again reviewed last week after the U.S. Department of State publicized a letter to WikiLeaks on November 27, stating that WikiLeaks may be in possession of documents that were provided in violation of U.S. law.  PayPal was not contacted by any government organization in the U.S. or abroad. We restricted the account based on our Acceptable Use Policy review.  Ultimately, our difficult decision was based on a belief that the WikiLeaks website was encouraging sources to release classified material, which is likely a violation of law by the source.

It turns out that PayPal had also blocked the Wikileaks account back in 2008 and 2009 too because of unacceptable policies used by . PayPal had also reviewed the Wikileaks account last week after the U.S. Department of State publicized a letter to Wikileaks on November 27, however, they have clearly mentioned that no U.S. or other government representatives had contacted them earlier.

PayPal has been notorious about locking and blocking accounts without proper notices, so this might just be another ploy to pacify people about where they stand.

Back in February 2010, PayPal had stopped personal payments to and from India without properly notifying users. Many users including me were upset about that issue, you can read my sentiments about the PayPal issue back then.  Nevertheless, whether it is something PayPal did themselves or based on some Governments’ directive, the damage has already been done. Looks like Wikileaks is taking a lot of people down this time.