Many PayPal
PYPL,
users appear ready to cash out after the company released a controversial policy change — which it now says was in error — that would fine users $2,500 for spreading misinformation.
The term “BoycottPayPal” was trending on Twitter over the weekend after the acceptable use policy (AUP) change came to light.
What’s more, Google searches for “how to cancel PayPal” and “cancel PayPal account” were still trending on Monday morning, along with “delete PayPal account” and “how do I delete a PayPal account.”
The Financial World news portal also reported that global Google searches for “delete PayPal” spiked 1,392% after the AUP announcement and the company’s subsequent apology, according to Google Trends data.
And boldfaced names including PayPal’s previous president, David Marcus, Tesla’s Elon Musk and Congresswoman Lauren Boebert — not to mention “Hercules: The Legendary Journeys” actor Kevin Sorbo — have joined the PayPal backlash on Twitter.
It should be noted that some other PayPal users came to the company’s defense. “I believe PayPal,” tweeted one. “It was a mistake.”
So what had everyone up in arms?
The new PayPal Acceptable Use Policy that went out over the weekend, which was expected to take effect on Nov. 3, was updated to include penalizing “the sending, posting, or publication of any messages, content, or materials” that “promote misinformation” or “present a risk to user safety or wellbeing,” as Mediaite reported. And those in violation would have a $2,500 fine taken directly from their PayPal accounts.
So in order to protect their money, some people began looking into how to pull their cash and personal data, and cancel their PayPal accounts. (There has not been a similar spike in searches to cancel or delete Venmo, however, even though that digital wallet and peer-to-peer payment service is owned by PayPal.)
But a PayPal spokesman has since said that, “PayPal is not fining people for misinformation and the language was never intended to be inserted into our policy,” and that updated policy was published in error.
This comes during a tumultuous time at PayPal.
PayPal shares have lost more than half their value this year amid broader pressure on technology and fintech names, as well as more business-specific challenges. The company cut its forecast several times throughout the course of 2022 as its executives reset expectations to align with the new economic reality. And PayPal executives also acknowledged that they were too upbeat about the ways that pandemic-era trends would carry through as the world reopened.
Analysts had been feeling more optimistic about PayPal’s prospects more recently thanks to the new, lowered bar. The company welcomed a dialogue with activists at Elliott Management, who made an investment in the company, and PayPal’s leadership team vowed to narrow its priorities by focusing on driving better performance in core areas, such as checkout.
Of course, PayPal isn’t the first company to face user backlash. Meta Platforms Inc.
META,
the parent of Facebook, has also sparked cries of “delete Facebook” at several points in recent years over concerns about privacy and politics. And some Twitter
TWTR,
users also threatened to delete their accounts after Musk first announced his potential takeover bid.
PayPal
PYPL,
stock is down almost 6% midday on Monday as a result of the misinformation policy backlash.
