This post contains an important update about our Seafile cloud service on https://app.seafile.de and licensing purchases through our web shops.
Yes, our PayPal account has been re-instated. PayPal called us this afternoon to apologize for the frustration and inconvenience that restricting our PayPal account has caused us. They said they made a mistake in our case. We are not a “high risk business” and sufficiently explained our business model to them when they asked us.
Theoretically we could accept PayPal payments again. But the whole situation has left a bad after taste. It just felt very wrong when we had to cancel all existing subscriptions last Saturday. We appreciate PayPal for apologizing and being so honest about the fact that they’ve made a mistake. But the whole incident has shattered our trust in PayPal. We just can’t imagine how we should be able to trust PayPal again after what has happened. That’s why we are currently still looking into alternatives.
From Sunday June 19th 2016 we are no longer allowed to accept payments via PayPal. PayPal has demanded that we monitor data traffic as well as all our customers’ files for illegal content. They have also asked us to provide them with detailed statistics about the files types of our customers sync and share on https://app.seafile.de
Since complying with this demand would violate German / European data protection laws (and also be morally wrong in our opinion) we have declined to comply with this demand.
PayPal has notified us on June 14th that we have time until June 19th to remove PayPal as a payment method and all mentions of PayPal from our web sites.
Please don’t worry about your data or your cloud account. We will not close any accounts. We will also continue our service on https://app.seafile.de – just without PayPal payments.
We are currently looking into other payment providers and hope to find a solution for the issue as soon as possible. Until we found one, you can keep using your existing cloud account. It’s just not possible to order new ones at the moment.
We apologize for any inconvenience this has caused you.
We were first notified about a “violation of the PayPal terms” on June 2nd 2016. PayPal sent us 16 questions to answer about the details of our business plan. These questions seemed to target file sharing or torrent services. We tried to answer them as well as we could and also tried to explain to PayPal that we are not a file sharing or torrent service but offer a file sync and share service similar to Dropbox.
After answering all their questions as well as we could but clearly stating that we do not monitor our customers’ data and that doing so would violate German / European data protection laws we had to wait for two weeks to receive an answer.
PayPal’s answer reached us on June 14th stating to solve the current “conflict” we would have to remove PayPal as a payment method. Now, in our opinion this doesn’t resolve this so called “conflict” at all so we tried once again to speak to PayPal and explain our situation. The PayPal service representative we had on the phone was very surprised about the whole situation and told us that this would likely be some kind of misunderstanding. Since other sync and share services are allowed to offer PayPal, there should be no reason why we should be treated differently.
But on the next day someone from PayPal’s brand risk management team called us to confirm the original decision and said we indeed have to remove PayPal as a payment method until June 19th. That other similar services are allowed to use PayPal doesn’t matter to them. That some of them even use Seafile also doesn’t matter. PayPal makes these types of decisions on a case by case basis and in our case have decided to not allow us to use PayPal any longer. This decision is final and cannot be appealed or cross checked by a second reviewer.
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