Netflix has found a new ally in PayPal in a long-running war against virtual private network services or VPNs. Recently, PayPal decided to withdraw support for customers who use its service to pay VPN providers.
PayPal’s decision will affect many
How many companies have been affected by this decision from PayPal is not yet clear, but Canadian VPN service provider Unotelly said last week that the payments processor ended its relationship with it unilaterally, and that without issuing any warning. It appears that people violating copyright laws or accessing content illegally using a VPN are PayPal’s target.
A PayPal spokesperson said, “As a global payments company, we have to comply with laws set by governments and regulatory agencies. PayPal does not permit the use of its service for transactions that infringe copyrights or other proprietary rights.”
VPNs enable users to access the Internet through an encrypted connection, which makes it harder for companies and governments to eavesdrop on the online activity of users. In short, they are better at protecting a person’s online privacy. VPNs make it possible for users to change their IP address to pretend that they are from somewhere else, and this bothers video streaming providers like Netflix a lot. For instance, if someone is in Russia, they can access all the content available in the U.S. using a VPN.
Blocking VPN: good and bad for Netflix
For Netflix, use of VPNs is likely hurting its licensing deals as it tries to expand to more countries with varying restrictions. In January, the company announced plans to ramp up its efforts to block viewers using VPNs to access content not available in their home country.
PayPal’s move, however, could pose a problem for Netflix as it will not allow VPN users to use their PayPal accounts to make payments to VPN service providers, no matter what their reason is for using one. This means that even a genuine VPN user who wants to use a VPN for general security purposes cannot make payment using PayPal either.
However, the fact that PayPal has sided with Netflix likely represents a major win for the video streaming giant and is another step forward in its march toward defeating VPNs.