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• The issue: Online payment processors like Venmo and PayPal often deny Americans access to these vital services based on their speech or viewpoints. 
• The concern: When these companies appoint themselves the arbiters of what speech and views are acceptable, shutting people and organizations out of the online financial ecosystem for wrongthink, they seriously undermine our culture of free expression.

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Imagine you could no longer use PayPal, Venmo, or another online payment processor because you run an organization that defends free speech for controversial speakers, operate an independent media outlet that challenges mainstream narratives, sell erotic fiction or “occult” materials, or . . . tried to submit an article about Syrian refugees into a newspaper awards competition.

These are not hypotheticals. They’re real, and they illustrate why online payment service providers should stay out of the business of policing their users’ speech and views.

Government regulation affecting payment processors may also threaten free speech. 

Access to online payment systems is crucial for the innumerable individuals and organizations that rely on financial support for their expressive activity. It’s essential to content creators’ ability to earn a living, to websites’ and other businesses’ ability to raise revenue, to fundraising by political candidates and nonprofit organizations, and to everyday Americans’ ability to consume content and support causes they believe in. When payment processing services act as political hall monitors or moral arbiters deciding what speech and viewpoints are out of bounds, they present a grave threat to free expression.

A small number of companies dominate the space, allowing them to wield significant control over the speech environment by denying service to users who express disfavored views or wade into controversial subject matter. PayPal (which owns Venmo), for instance, has . Merchants and individuals put on payment processors’ blacklists may find themselves in a financially precarious situation. As the Electronic Frontier Foundation :

Payment platforms are currently extremely centralized, creating what in practice is a duopoly. MasterCard and Visa are behemoth payment service providers, able to dictate through their internal policies what types of speech will and won’t be acceptable online. Other payment providers, including smaller entities like PayPal, Stripe, and many of the Bitcoin payment service providers, are bound by their agreements to Visa and MasterCard.

When consumer choice borders on illusory, any argument that those dissatisfied with Visa’s or �ʲ���ʲ���’s terms and conditions should simply seek other payment methods is not particularly convincing — or realistic. 

The lack of due process and transparency only exacerbates the threat to free expression. Policies prohibiting transactions related to certain kinds of speech are often vague. Users may not know exactly why they were suspended or banned, and they may lack a meaningful opportunity to appeal a determination that emerged from a hidden and unaccountable decision-making process. While famous individuals or organizations might sometimes manage to muster enough public attention and support to pressure a payment service provider to reverse an unjust decision, many ordinary Americans will be left without recourse.

Companies’ terms and conditions typically prohibit at least some activities or transactions that involve expression of certain First Amendment-protected views, or, to use ������ýapp�ٷ�’s language for “yellow light” university policies, can too easily be applied to restrict protected expression. Common targets are “hate speech” and sexually explicit content. A few examples:

• �ʲ���ʲ���’s (and that of Venmo) states users may not use PayPal for transactions involving:
  • “the promotion of hate, violence, racial or other forms of intolerance that is discriminatory or the financial exploitation of a crime”
  • “items that are considered obscene”
  • “certain sexually oriented materials or services.” 
• PayPal also requires pre-approval to accept payments for certain services, including delivery of mature audience content, live streaming/broadcasting, and file sharing. 
• Stripe use of its services by any business or organization that: 
  • “engages in, encourages, promotes or celebrates unlawful violence or physical harm to persons or property”
  • “engages in, encourages, promotes or celebrates unlawful violence toward any group based on race, religion, disability, gender, sexual orientation, national origin, or any other immutable characteristic” 
  • involves “[p]ornography and other mature audience content (including literature, imagery and other media) depicting nudity or explicit sexual acts.”
• Amazon Pay “pornography” and “sexually explicit materials,” as well as goods or services that “would be generally offensive to others.” Examples of the latter include “hate literature, occult materials, and any other items or activities that in our judgment are illegal, inappropriate or offensive in connection with our services.” 
• Square also payments in connection “[a]dult entertainment oriented products or services (in any medium, including Internet, telephone or printed material)” and “[h]ate or harmful products.” And, like Amazon Pay, the service apparently has no tolerance for witches and sorcerers, banning “[o]ccult materials.”
• Visa to ban merchants for any reason, including “brand-damaging Transaction activity.”
• �Ѳ����ٱ����������’s state: “A Customer must not directly or indirectly engage in or facilitate any action that is illegal or that, in the opinion of the Corporation and whether or not addressed elsewhere in the Standards, damages or may damage the goodwill or reputation of the Corporation or of any Mark, or damages or may damage the integrity of the Mastercard system.”

Many examples exist of major payment processors shutting off the financial spigot for people, organizations, and websites engaged in or hosting constitutionally protected speech. Sometimes the decision is deliberate; other times it’s the result of poorly calibrated algorithms going off the rails. To , these companies “do not have the skills, expertise, or position to determine complex issues of digital speech.” Consider these examples:

• In September 2022, PayPal Toby Young’s personal account and the accounts of two organizations he founded — the Free Speech Union, a UK-based free speech organization, and the Daily Sceptic, which publishes articles skeptical of Covid restrictions and other controversial topics. A PayPal spokesman , “Achieving the balance between protecting the ideals of tolerance, diversity and respect for people of all backgrounds and upholding the values of free expression and open dialogue can be difficult, but we do our best to achieve it.” After significant public pushback, PayPal the accounts.
• Earlier this year, PayPal of independent media outlets Consortium News and MintPress, both of which have been a source of skeptical reporting about the Russia-Ukraine conflict.
• Also in 2022, PayPal shortly after Etsy banned him for selling merchandise that “promotes, supports, or glorifies hatred or violence towards protected groups.” Wright is a critic of transgender activism, and his merchandise included text like “Reality’s Last Stand” (the name of his Substack) and “Defender of Reality.” PayPal told him “there was a change in your business model or your business was considered risky.” After Wright sought a more detailed explanation, PayPal told him he would need to “submit a legal subpoena.”
• Last year, PayPal of Larry Brandt, a prominent supporter of internet freedom who primarily used the payment system to donate to Tor — open-source software that protects internet users’ privacy. PayPal denied that the decision was related to concerns about Tor but failed to provide any other explanation. Brandt had no way to appeal the decision.
• In 2018, PayPal of Soulseek, an online chat community that allows users to share files, on the grounds that it had not received “pre-approval” from PayPal to run a file-sharing site. As a result, Soulseek’s owners could not receive PayPal donations they used to offset the costs of running the site. Soulseek had received pre-approval in 2015 (only after EFF’s intervention), and PayPal gave no indication of how the website could obtain it again.
• PayPal a user for buying a T-shirt from Isis — the heavy metal band (which formed years before the terrorist group rose to prominence). 
• Venmo a Muslim woman’s payment to a friend with the note “al-aqsa” to pay her back for a meal at Al-Aqsa Restaurant in the Bronx. The Al-Aqsa Mosque is one of the holiest sites in Islam. Venmo also of a user who paid friends for dinner at a Persian restaurant in Manhattan because of keywords related to Iran, which is subject to U.S. sanction laws limiting transactions between the countries.
• PayPal of a Canadian media association after it tried to pay for entry of an article about Syrian refugees into an awards competition.
• Payment processors took several actions in the wake of the January 6 riots. PayPal that raised funds for Trump supporters to travel to Washington, DC, on January 6, and with a Christian crowdfunding platform that has hosted fundraisers for Kenosha shooter Kyle Rittenhouse and Proud Boys leader Enrique Tarrio. Stripe for Trump’s campaign website for violating its policy against encouraging violence.
• PayPal has accused of promoting hate speech, such as Gab and InfoWars. 
• In 2018, PayPal belonging to Proud Boys founder Gavin McInnes and three antifa groups, without naming any specific actions that led to the decisions. Controversial YouTuber Stefan Molyneaux was the following year.
• In 2012, PayPal ebook distributor Smashwords to remove works that portray bestiality, rape, or incest, claiming it “draw[s] the line at certain adult content that is extreme or potentially illegal.” As author Suw Charman-Anderson , “Some works may cross a line into illegality, but whether they do is something that the judicial process, in full public sight, should discuss. It is not something to be dealt with by fuzzy terms of service that result in the chilling of free speech.” PayPal later their policies to protect legal fiction from censorship.
• In 2010, WikiLeaks began disclosing the contents of diplomatic cables, leading government officials to criticize credit card companies for allowing people to donate to the organization. , and soon suspended WikiLeaks’ accounts. This case illustrates the danger of government jawboning, even if the pressure doesn’t rise to the level of a First Amendment violation.
• Amid an ongoing lawsuit against online porn network operator MindGeek for allegedly distributing child pornography, Visa and Mastercard of MindGeek’s advertising arm TrafficJunky, so the companies’ cards could not be used to purchase advertising on any MindGeek-affiliated sites, including PornHub. Visa and Mastercard previously with Pornhub after a New York Times column accused the website of hosting nonconsenual and child pornography. 
• In late 2021, citing pressure from “banking partners and payout providers,” OnlyFans it would start banning sexually explicit content, only to reverse that decision days later following massive backlash.
• In 2017, EFF that Fetlife, an adult social network centered around BDSM, lost credit card processing privileges, with justifications including “complaints about ‘blood, needles, and vampirism’” and “illegal or immoral reasons.”

Even when the target of the algorithm is arguably legitimate, the risk of error is significant. A parody is mistaken for a copyright violation. Buying a heavy metal band’s T-shirt is confused with material support of a terrorist organization. Paying a friend back for lunch is mistaken for illicit transactions with a hostile foreign country.

EFF has payment service providers as “weak links” in the chain of online intermediaries that “can operate as choke points to accomplish widespread censorship”:

Since payment service providers may provide vital financial pathways for activists, dissidents, and other controversial figures, they are attractive points of control for anyone hoping to use Internet intermediaries as censors — especially governments seeking to censor speech.

Payment services are also targets for powerful actors who want to shut down controversial sites under the guise of preventing IP infringement. Such proposals could halt the operations of controversial web services, including popular hosting sites like Rapidshare and Mediafire (neither of which has been found liable for copyright infringement), by cutting off their means of financial support.

Payment services might also decide voluntarily to stop processing certain sites’ payments as capitulation to government or industry, thereby putting small companies at risk and endangering their ability to speak online. This would not extend only to those convicted of crimes. Any online venue under scrutiny for controversial practices could be at serious financial risk if a big payment service decides to stop processing payments for it.

Advocacy groups have also criticized the lack of due process provided to users who are suspended or banned. In many cases, PayPal doesn’t even tell users why it took action against them, other than to say they violated the acceptable use policy. Last year a coalition of groups including EFF and the ACLU PayPal and Venmo to “provide more transparency and accountability around its policies and practices for account freezes and closures, including publishing regular transparency reports, providing meaningful notice to users, and offering a timely and meaningful appeals process,” consistent with the .

Various commentators have criticized payment processors’ censorship habits. Libertarian writer Kristin Tate :

The potential scope of the soft social credit system under construction is enormous. The same companies that can track your activities and give you corporate rewards for compliant behavior could utilize their powers to block transactions, add surcharges or restrict your use of products. At what point does free speech — be it against biological males playing in girls’ sports, questioning vaccine side effects, or advocating for gun rights — make someone a target in this new system? When does your debit card get canceled over old tweets, your home loan denied for homeschooling your kids, or your eBay account invalidated because a friend flagged you for posting a Gadsden flag?

The past examples of censorship show controversial speech or views on the left are not free from risk either. 

�ʲ���ʲ���’s CEO Dan Schulman the company’s policy against hate speech. “Probably the most important value to us is diversity and inclusion,” Schulman said. He claims PayPal needs to draw a “line between free speech and hate.” According to Schulman, PayPal removes 10 to 100 accounts a month for promoting “hate, violence or racial intolerance,” and none of those decisions has been reversed. In 2021, PayPal with the Anti-Defamation League “to fight extremism and hate through the financial industry and across at-risk communities.”

The major credit card companies take a more hands-off posture, notwithstanding their skittishness on porn. Visa that it “takes no position with respect to lawful goods and services bought and sold by the people and the companies who use our payment service” — though it reserves the right to ban merchants for “brand-damaging” transaction activity. In 2019, SumOfUs, a left-wing advocacy group, pressured Mastercard to stop payments to far-right groups. �Ѳ����ٱ����������’s chairman told the protestors: “If it is lawful, then we need to respect that transaction. If it is something that is swimming against the tide of society, it’s for the society to rise up and change the law.” Meanwhile, Mastercard adult websites to verify not only the age and identity of anyone featured in a picture or video, but the identity of the person uploading it, and to review all content before publication. One commentator “there is a strong incentive for payment processors to err on the side of placing innocent merchants on the list” rather than end up intertwined with illegal activity.

A vibrant culture of free expression depends on Americans’ ability to speak their minds without losing access to services that are integral to life in modern society. 

Government regulation affecting payment processors may also threaten free speech. The Stop Online Piracy Act was a failed congressional bill that would have required payment processors to suspend payments to any site that merely receives a notice of intellectual property infringement. While the Digital Millennium Copyright Act shields certain online intermediaries from copyright infringement liability for taking down infringing content, this safe harbor provision to online payment processors.

Jawboning by government officials is also a concern and may play a significant role behind the scenes. of the Bank Policy Institute, when a bank refuses service to a customer because of “reputational risk,” it is sometimes due to “a bank regulator whispering to them, ‘We don’t like your being in this business.’” Other times, it’s not so furtive and may be unconstitutional. In Backpage.com v. Dart, the U.S. Court of Appeals for the Seventh Circuit a sheriff violated the First Amendment when he used the threat of prosecution to coerce Visa and Mastercard to discontinue business with the online classified advertiser Backpage. 

FIRE’s recommendations

FIRE recommends payment processors adopt the following principles to avoid eroding our society’s culture of free expression:

1. Refrain completely from taking action against accounts based on the views or lawful expression of the account holder. 
2. Be clear and specific about what transactions are prohibited, with detailed guidance and examples. Vague rules lead to subjective, arbitrary, and unfair decisions.
3. Provide due process to users whose transactions are voided or whose accounts are frozen or closed, including notice of the decision and the reasoning behind it, information on any involvement of a state actor (unless prohibited by law), and a meaningful opportunity to appeal and present additional evidence with timely review by a panel not involved in the initial decision.
4. To ensure transparency, regularly issue public reports providing information on requests to shut down, investigate, or surveil accounts, modify policies, or supply user information; how the payment processor handled the requests; and the overall number of accounts frozen or closed, categorized by the alleged policy violated. It is particularly important that companies are transparent about government involvement in any enforcement actions. 

(See from Electronic Frontier Foundation, et al., to PayPal and Venmo, June 15, 2021.)

A vibrant culture of free expression depends on Americans’ ability to speak their minds without losing access to services that are integral to life in modern society. FIREwill continue to advocate for reforms that make this possible.