PayPal moves to stop the abuse of its service by gambling addicts
PayPal (PYPL) has tightened the rules around payments on its platform in response to criticism that it facilitates problem gambling in the United Kingdom. According to a Guardian report, gambling addicts in the United Kingdom have resorted to using PayPal to circumvent bank limits, putting the company’s reputation at risk.
In the wake of such maneuvers, British lawmakers and gambling experts have asked PayPal to do something to prevent its service from being misused in ways that could result in people accumulating huge debts that could force them into bankruptcy.
Barclays (BCS), Lloyds Banking Group (LYG), Royal Bank of Scotland Group (RBS), and Banco Santander (SAN) are other payment providers in Britain that have taken steps or explored measures to ensure that customers don’t overspend on gambling.
A good name is better than riches
PayPal’s move to try to restrict compulsive gambling-related payments on its platform can be viewed as an investment in its reputation. For a business like PayPal, which has a long-term view of its future, a good name is certainly better than short-term riches. In the past year, PayPal showed how far it could go in protecting its image when it decided to stop business dealings with conspiracy theorist Alex Jones and his publishing platform, InfoWars. Facebook (FB) and Twitter (TWTR) also banned InfoWars from their social networks.
PayPal’s goal is to become a one-stop shop for digital financial services. The company generated $4.2 billion in revenue in the fourth quarter of 2018, an increase of 13% year-over-year.