back to article MIT and CERN's secure webmail plan stumped by PayPal freeze

The Proton Mail project, which offers end-to-end encrypted webmail from the user's browser, has had a stick thrust into its operational spokes courtesy of PayPal. The MIT-and-CERN-inspired project, based on Switzerland, had decided against VC funding for reasons of credibility among users. Instead, it relies on users willing …

  1. Anonymous Coward
    Anonymous Coward

    "and the organisation says all disks in its Swiss data centres are encrypted."

    What's the point of that? I'd have thought the biggest risk to data stored on their disks would be warrant from the Swiss government or getting hacked. In neither case does disk encryption bring anything to the table. Disk encryption would be useful only in the event of a burgularious theft, something that I assume rarely happens in Switzerland.

    Otherwise it looks quite interesting. Maybe PayPal have been told to cut them off...

    1. Evil Auditor Silver badge

      Disposal

      Theft from a data centre may not be the biggest risk in Switzerland. I regard disk encryption (of non-mobile, located in a data centre machinery) as part of the disposal process; I've yet to see a hardware disposal procedure that cannot fail.

  2. StephenH

    "questioned ...if we have government approval to encrypt emails"

    Does Paypal have government approval to ask such questions?

    1. John Doe 6

      "Does Paypal have government approval to ask such questions?"

      Yes they have... this is a requirement for bank operation in the US and if PayPal do not obey the rules in the US they will not be able to process any of the major credit cards since:

      - VISA and MasterCard/EuroCard are operated by Citibank (that is their mothership CitiCorp)

      - American Express is based in USA as the name suggests.

      - Diners is also based in USA.

      ....and all transactions goes thru SWIFT which is owned by the major members... that is more or less the big US banks.

      Unless we build an economy without USA we will not be able to do anything without approval from USA.

      1. Destroy All Monsters Silver badge
        Headmaster

        No they don't

        1) PayPal is not a bank; it is an outfit that lives from people transferring money through them

        2) They are not the International Organization Against Crypto And Other Terrorist Tools either

        3) PayPal board members should be handed over to ISIS for a quick interrogation about their deep knowledge of the koranic verses for this.

        1. John Gamble
          Boffin

          Re: No they don't

          PayPal is not a bank; it is an outfit that lives from people transferring money through them

          Caveat: Wikipedia entry, albeit a sourced Wikipedia entry:

          In the United States, PayPal is licensed as a money transmitter on a state-by-state basis. PayPal is not classified as a bank in the United States, though the company is subject to some of the rules and regulations governing the financial industry including Regulation E consumer protections and the USA PATRIOT Act.

          In 2007, PayPal Europe was granted a Luxembourg banking license, which, under European Union law, allows it to conduct banking business throughout the EU. It is therefore regulated as a bank by Luxembourg's banking supervisory authority, the Commission de Surveillance du Secteur Financier (CSSF).

          In Australia, PayPal is licensed as an Authorised Deposit-taking Institution (ADI) and is thus subject to Australian banking laws and regulations.

          Executive summary: yeah, they have to obey some or all (depending on the continent) of the banking regulations regarding transfer of money.

      2. Tom 13

        Re: this is a requirement for bank operation

        No, there is no such regulation. In fact, given privacy requirements on banks, it is arguable the reverse is true: that they must use encryption on email handling financial information.

  3. John Doe 6

    ...and now...

    ...we see the little problem in having almost all financial operations in the west being dependent of corporations based in US of A.

    No one can, in reality, pay for anything without Uncle Sam says OK.

    1. Evil Auditor Silver badge

      Re no one can pay for anything without Uncle Sam says OK

      At least as long as it is paid in US$. It cost BNP Paribas $8.8bn to find out...

      1. bazza Silver badge

        Re: Re no one can pay for anything without Uncle Sam says OK

        Er, cash? Cheque? EBanking? Direct Debit?

        1. John Doe 6

          Re: Re no one can pay for anything without Uncle Sam says OK

          Right... Cash yes but that's not an issue here, we talk international transfers.

          All the others can be frozen if they are international transfers.

    2. Destroy All Monsters Silver badge
      Big Brother

      Re: ...and now...

      No one can, in reality, pay for anything without Uncle Sam says OK.

      And with FATCA now in effect, no-one can get his savings from underneath his nose (and savings have been, to all intent and purposes, outlawed via negative interest rates).

  4. I. Aproveofitspendingonspecificprojects

    Let's hope the Germans have the balls to shit on them

    I wish the German banks (or the Swiss, maybe) can come up with a suitable replacement for Pay Pal.

    It's incredible that none of the lords and masters of the internet has set up offices outside their NSA's "right to screw everything" domain.

    I gave up hope for all things USAnian when the Smithsonian went from HTML4 to Adobe M$ only. I've been smarting over that for ages while all this Snowden business was going on. There is just so much bum-buggery involved it hurts.

    1. Anonymous Coward
      Anonymous Coward

      Re: Let's hope the Germans have the balls to shit on them

      oh hell no. German banks (especially the retail banks) are still stuck in the last century. Chip and pin is relatively new, credit cards are a rarity, online banking is still a novelty, they still use fax machines, retail banks refuse to open on Saturdays (the unions pretty much run the business),touch payments are non-existant -- you name it.

      I think online payments would be just a wee bit too advanced for them to cope with.

  5. TheColinous

    This is a bit rich in ironies.

    Pierre Omidyar founded Ebay and First Look media who holds the NSA files.

    Ebay owns PayPal

    PayPal acts like this against an entity created to partways counter the dangers described in the NSA files.

    So, will PayPal stop payments to Pierre Omidyar who funds the publications of the NSA files?

  6. llaryllama

    It's PayPal wot's the problem

    I think you guys missed the part where it says that direct credit card payments are still being accepted.

    The problem here is not the US government but PayPal - despite years of promises that they are getting better they are still basically acting as a bank without having to be regulated as one.

    We have to use them because they have a total monopoly and it's pretty amazing what they can get away with. I am constantly waiting in dread for the yearly Limited Account email having displeased the PayPal Gods.

    The only thing that these guys seem to understand is a hard hitting legal firm but for most people that's not an option so they just have to bend over and take the inevitable shaftings.

  7. Anonymous Coward
    Go

    I wonder....

    ...is the problem they are using PayPal Amercia as it's on Kickstarter?

    If they switch to Paypal Europe, then it is a Luxembourg bank, governed by their laws, not the US's...

    I think...

    1. jai

      Re: I wonder....

      technically, it's on Indiegogo, not Kickstarter, but i guess that's still going to be passing the funding through the States, yes?

      1. Tom 13

        Re: passing the funding through the States

        except that passing funding through the States is irrelevant. Banks are required to REPORT on suspicious transactions, not stop them. Because quite frankly too many honest transactions raise flags on the suspicious list (e.g. deposit of over $10,000).

        So this is all down to somebody at PayPal being a butthead.

  8. Suricou Raven

    Meanwhile

    Bitcoin price is up a little.

    This is the reason bitcoin was invented. Sure, it's unproven and has many serious fundamental flaws, but right now the financial industry is so hated and people are so desperate for an alternative they'll try anything that promises to escape the dependency.

  9. DropBear
    Mushroom

    Paypal is playing fast and loose with other people's money way, way, WAY too much lately for my taste. They apparently decided they are the absolute and infallible moral arbiter of What You Are Allowed To Pay For who needs to answer to no one whatsoever. I can only hope one day they get all the pitch-black Karma they deserve in full, but I'm not going to hold my breath...

  10. Christoph

    When we pressed the PayPal representative on the phone for further details, he "

    said "Ouch! Err ... we .. . ouch! ... can't, um, comment on ... ouch! ... any of that"

  11. Infernoz Bronze badge
    Flame

    WTF is anyone still using PayPal for?

    I blacklisted PayPal because the disputes procedure was black comedy, so had to do a credit card chargeback; I couldn't even trust them to forward a credit card payment recently, so I'm frankly astonished that they are still in business!

    Vendors and people expecting donations please just wake up and dump these scam artists PayPal; there are plenty of better and cheaper competitors, so I will ignore you if the best you can offer is credit card pass through via PayPal now!

    1. sabroni Silver badge

      Re: there are plenty of better and cheaper competitors

      Well tell us who then! Seriously, I'd like an alternative. One that appears on at least some of the checkout pages I visit.

      1. Gordon 10 Silver badge

        Re: there are plenty of better and cheaper competitors

        The only serious contender I have seen is on a few websites is google checkout. which obviously is a whole different kind of bad.

        1. Tom 13

          Re: google checkout.

          I wanted Google Checkout to be a good alternative. Even gave them a try when they first started out. Two orders, no deliveries, no ability to contest or get my money back. Never, ever, ever again.

      2. TheColinous

        Re: there are plenty of better and cheaper competitors

        The problem is, even if something like the Swedish Payson somehow grew into an EU equivalent of PayPal, the credit card VISA, Mastercard etc companies are still American.

    2. Nigel Whitfield.

      Re: WTF is anyone still using PayPal for?

      Yes, please do share who is a reasonable alternative - particularly for people who may just get a few donations here and there.

      While some other outfits certainly do have smaller per-transaction fees, I've not yet found one that has small fees when you take into account their monthly payments.

      If you have lots of small donations, and some months none at all, then a fixed monthly fee can wipe out a huge chunk of what you've got coming in.

      Like many PayPal users, I'd be delighted to find someone more rational to deal with, but in a good month, I might get just over 20 donations to one of my sites, and I've not found anyone else that can do such low volumes without committing a large chunk of potential future donations just to provide the facility.

      1. Jonathan 29

        Re: WTF is anyone still using PayPal for?

        Many companies are entering this space. Most recently Amazon announced they were going to be expanding Amazon payments for 3rd parties. There are no monthly fees.

    3. Ben Tasker Silver badge

      Re: WTF is anyone still using PayPal for?

      Not to mention that whilst you may not use Paypal, most other people do (and don't use other services). So if you don't accept Paypal you're artificially (and quite severely) limiting your own market.

      I had to provide them with ID a while back because the amount I'd received passed a threshold. Normally they do an 'online check' but it seems that I don't exist, wherever it is that they check.

    4. Tom 13

      Re: WTF is anyone still using PayPal for?

      I avoided Paypal for a long, long time. I've only within the last year gotten one for the sole reason that they were the only accepted way to make payments to a website. And no, I haven't been on eBay in a long long time either.

      You want me to stop using Paypal? Great. Give me an alternative. Because credit and debit cards just don't always work. And I say that as a crazy 'Merkin.

  12. Anonymous Coward
    Anonymous Coward

    For fuck sake...

    “When we pressed the PayPal representative on the phone for further details, he questioned whether ProtonMail is legal and if we have government approval to encrypt emails,” author Andy Yen claims.

    In a world where illegal government spying is legal, PayPal becomes the right-arm of the law... Yeah, that makes sense!

  13. The BigYin
    FAIL

    The USA again

    "if [Proton Mail has] government approval to encrypt emails"

    So in the USA you need to get state approval to encrypt your stuff, or offer encryption as a service?

    USA - destroying freedom one regulation at a time.

    1. Lyndon Hills 1

      Re: The USA again

      For quite some time you needed state approval to export encryption code. It was considered to be munitions. PGP code was once distributed in printed form.

      1. Tom 13

        Re: The USA again

        Certain levels of encryption are still regulated as munitions in the US. That only applies to exports, not imports. It was always completely legal to import PGP* into the US. (On the import side the question you get from the security wonks is whether or not you can trust the code, so usually not workable inside government.) And it was completely legal for entities outside the US to export and import PGP depending on their local laws.

        *If you're going to tell the PGP story it is important to tell the whole story. It wasn't PGP per se that was outlawed. At the time you couldn't export triple DES either. The sticking point was whether or not the algorithm allowed for more than 52 (56?) bits of encryption. Since PGP wasn't algorithmically limited it was illegal to import. At that point in time MS even had to distribute two versions of IE because the US version allowed more encryption than the law allowed. The insanity was eventually recognized for the insanity it was and the law was harmonized with reality. On the question of whether or not encryption should be treated as a munition, given the outcome of WW2 it seems pretty obvious encryption is worth more than a whole lot of munitions. Not sure it compares to nuclear bombs, but not sure it doesn't exceed them either.

  14. kmac499

    PayPal and US extra-terrestrial ? law

    Ok maybe that should be territorial...

    On a recent Radio consumer prog some disgruntled PayPal customers were talking about PayPal supending their accounts, without notice of course..

    The common reason was somewhere in the text of the sale was the word 'Cuban' as IIRC 'Cuban Heels' 'Tickets to a Buena Vista (cuban) tribute band' etc etc..

    Yup that's right when in doubt PayPal wouldn't risk trading with the enemy. Which would have been an interesting alternative phone call end to the missile crisis..

    Kruschev "Fidel We've shipped the missiles where's the money"

    Castro "We sent it ages go by PayPal"

    Kruschev "Bugger;"

    Castro "So you don't want to me to fill in the seller feedback then?"

    1. tony2heads

      @kmac499

      Mark Cuban must have a lot of trouble getting paid then

  15. earl grey
    Flame

    almost signed up for pay-scam

    I looked into those wankers a long time ago (pre eBay days) and they wanted more of my life history than my local bank gets; including orifice sizes and organ measurements. I'm used to getting my sandpaper without; so i exited their site and never looked back.

  16. Aslan

    Paypal has issues, but I like them

    Paypal has some major issues, but they serve and protect customers in a way that Credit card companies don't. For the consumers, Paypal always has someone there to chat with or speak to on the phone. Paypal works to resolve the issue and makes sure things end well for me.

    I've made a lot of purchases online over the years and on more than four occasions Paypal has helped me out.

    1) I bought an $80 toy (out of production) on eBay, the seller sent me another toy by the same name, but not the model of toy pictured. The toy they sent was in production and worth $10. They said they accidentally copy pasted the wrong picture, I think it was a scam, but it doesn't matter I had Paypal at my back. Paypal had the eBayer pay return shipping costs and send me the correct item.

    2) I bought the plastic piece of a laptop that goes above the keyboard with the media buttons and a power button on it. In the service manual the part number displayed in the auction included the electronics. The eBay seller shipped me the plastic piece without the electronics. After I contacted him, he told me to keep it and refunded my payment.

    3) I've bought many computer products from companies with unpronounceable Asian names that I've never heard of before, because I knew Paypal would be there for me if the product didn't function as described. I wouldn't have done business with these people otherwise.

    4) I bought an expensive and heavily, nastily DRM'd piece of software from an independent author because it was exactly what I needed. I provided all necessary information through Paypal, but not my address as the author would not be mailing me anything. The less people who have my personal info the better. The author ignored me. After I followed up he insisted on an address I declined to provide it unless he wished to mail me a copy on disk. He ignored me. I followed up and he finally said he was not giving me a key now or ever. The author did not refund my money. I contacted Paypal providing a record of the conversations and they forced a refund. I've been pirating that piece of software ever since. I'm very grateful to the pirates too because the nasty DRM that secure deletes (makes unrecoverable), if the program has a licensing issue, the data files that the program creates has been removed.

    A business accepting Paypal for the most part means they are a legitimate respectable company, that they will do what they say, and that I'm safe ordering from them even if I've never heard of them before. It means while I deal with the company first if they don't do what they say, or deliver what I ordered, I've got somebody to back me up

    Credit card companies are supposed to provide some protections, but they're legally required to. With my Chase Credit card when I had an issue with a merchant, I found the people I talked to disinterested, they frequently transferred me and gave me run around answers eventually I got Chase to solve the issue, but it took 4 hours and a huge amount of effort on my part.

    Paypal makes international purchases safe and easy too. In fact I'd go so far as to say that if a business on the internet doesn't accept Paypal I'm going to find a company who does and buy there instead even if the product is 10% more expensive. So while I'll acknowledge Paypal has issues for those selling goods I must say many of your competitors selling goods on the internet are scamming fraudsters, and I feel I need protection from you on the whole. Paypal allows me to have the trust to buy from you.

    1. Anonymous Coward
      Anonymous Coward

      Re: Paypal has issues, but I like them

      Good for you.

      Though, "Credit card companies are supposed to provide some protections, but they're legally required to. " makes no sense .

      Astroturf elsewhere

      1. Aslan

        Re: Paypal has issues, but I like them

        Astroturf? You're the one commenting anonymously where as I have a long history on The Register. I was a member before Goggle permitted searching for the word the. After Google permitted searching for the word the, The Register held the top spot.

        I did attempt to fix that after I posted but by the time I did so edit was disabled. To expand on "Credit card companies are supposed to provide some protections, but they're legally required to. " Credit card companies in the US are legally obliged to limit your maximum liability from fraudulent transactions to $50. This is something they're required to do not something they want to do, so they make the process confusing, and difficult. As opposed to Paypal which exists in part to facilitate transactions between people and small businesses. I'd say that Paypal's popularity depends on it's customer service.

        Keep in mind your credit card company is out there to make money. Remember the "Verified by Visa" program? You would register your card online get a special pin and when you paid with that Visa card you'd be redirected to Visa's site where you'd enter the pin. Sounds like a great way to prevent fraud right? I thought so, then I looked a little closer and found that the terms and conditions of the use of the service transferred all fraud liability to the consumer instead of the credit card company, relieving the credit card company of the US governments legally required $50 maximum liability to the consumer limit.

        Further AC you attack without offering a solution. I've looked at Google Payments, and have an account. Google payments offers some protections to me as a consumer, but the ones offered by Paypal are better. I haven't interacted with Google Payments customer service, but I suspect Paypal's customer service is better. For the time being I choose Paypal.

        1. Ole Juul

          Re: Paypal has issues, but I like them

          I also use Paypal, as well as a Mastercard which is not attached to a bank account and which does not allow automatic withdrawal. The Mastercard may actually be the better service when I think about it. However, astroturfing or not, perhaps this thread is not the place for me to write a half page dissertation on why I like one or the other.

  17. LucreLout Silver badge

    Which government?

    <i>“When we pressed the PayPal representative on the phone for further details, he questioned whether ProtonMail is legal and if we have government approval to encrypt emails,”</i>

    They should have responded simply:

    Yes. The Swiss government requires no such approval prior to encrypting emails.

  18. MrRtd

    I see a lot of people saying "don't use Paypal", but none have offered a widely available international solution that is comparable.

    Visa and Mastercard could easily offer expanded services that are identical to PayPal, but I am assuming since they haven't yet, that they are not interested in anything besides their core business. Google already is a privacy nightmare so that option is dead. Amazon has a new service, but it too can easily be arbitrary just like PayPal. Interac doesn't have the same online presence and is tied to a bank account rather than being an option like Paypal. So for many people, PayPal is still a major option that cannot be easily ignored.

    1. Ole Juul

      Paypal is indeed convenient. I'm not clear on what actual financial problems a consumer can encounter with it though. I haven's seen any yet. For someone using it to take payment, obviously the US centric policies such as this story references, are not acceptable.

      For online payment I also use a Bank of Montreal Travel card. I add money like a bill payment (without attachment to any other account), but it appears in 1-2 days, as opposed to 9-10 days for Paypal. Ability of anybody besides me to withdraw money is obviously a no no. A merchant account with them is likely as problematic as any of the others.

      1. Aslan

        My bank doesn't provide anything like that here in the US. They've got AMEX travelers checks, but then that's AMEx, and they aren't everywhere, and in this day and age businesses hate taking checks. As a consumer one can receive money in any currency from people around the world, say a group buy on software, or a birthday present where overseas postage would cost more than the present, or to get money to family. Many artists craftsmen and bands use Paypal, that would be commercial, but only in a small way. If Paypal sees something that looks like fraud Paypal can disable your account, thereby preventing you from making any purchased or accessing the balance held in your account.

        With Paypal in the US money is moved faster, 3-5 business days to get funds into a Paypal account from a bank account, and there's an option called instant transfer where if you have a credit card on file you can make a purchase or send money with funds in your bank account.

        Hating on Paypal has been popular for a few years now, and while the articles do amuse, and Paypal has been foolish in their policies and PR, Paypal is a good option for many people and it's the one I choose for the moment. Admittedly I miss their initial zeal from when they were founded, about destroying banks and breaking down international barriers, they look more like a bank each year, but noting better has come along. That said, I'm long on Bitcoin, but Bitcoin doesn't address the market Paypal does.

        1. Aitor 1

          Travellers checks

          Those I would never accept payment with.. they can be forged.

  19. connermac725

    been using them since inception

    Never had an issue with them myself and have used them off and on since the day they started

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