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There are way too many stories of Paypal unfairly and ridiculously cutting off services that rely on it as a payment mechanism, but here's yet another one. Mega, the cloud storage provider that is perhaps well-known for being Kim Dotcom's "comeback" act after the US government shut down Megaupload, has had its Paypal account cut off. The company claims that Paypal was pressured by Visa and Mastercard to cut it off: Visa and MasterCard then pressured PayPal to cease providing payment services to MEGA. MEGA provided extensive statistics and other evidence showing that MEGA's business is legitimate and legally compliant. After discussions that appeared to satisfy PayPal’s queries, MEGA authorised PayPal to share that material with Visa and MasterCard. Eventually PayPal made a non-negotiable decision to immediately terminate services to MEGA. PayPal has apologised for this situation and confirmed that MEGA management are upstanding and acting in good faith. PayPal acknowledged that the business is legitimate, but advised that a key concern was that MEGA has a unique model with its end-to-end encryption which leads to “unknowability of what is on the platform”. MEGA has demonstrated that it is as compliant with its legal obligations as USA cloud storage services operated by Google, Microsoft, Apple, Dropbox, Box, Spideroak etc, but PayPal has advised that MEGA's "unique encryption model" presents an insurmountable difficulty. That last line is particularly bizarre, given that if anyone recognizes the value of encryption it should be a freaking payments company. And, of course, Paypal can't know what's stored on any of those other platforms, so why is it being pressured to cut off Mega?