-1

It's been in the news recently that payment processors are dropping their clients left and right, meddling with small businesses, and not being very upfront about it. In articles that mentioned why a company is now having to fight with their payment processors, often terms of service agreements are mentioned, with payment processors saying something to the effect of "Well, you agreed to these terms when you signed up for our service, so this problem is all on you." However, often the companies being dropped have been working with their processor for a long period of time.

Paypal is now known to meddle with their partners based on their politics (1, 2; 3), in addition to having a bad reputation (1, 2).

Intuit is meddling in the monies, and policies, of legitimate gun companies.

Square is jumping on the bandwagon (1).

Stripe has also attempted to kill Gab.com, in addition to dropping legitimate sales activities. (1, 2)

  1. Why do payment processors meddle with their business partners?
  2. Why would they engage in political assassinations?
  3. Why would payment processors require vendors to go above and beyond the law for certain transactions?
  4. Doesn't this meddling incur liability against otherwise legally covered business transactions that aren't meddled with?
  • Seems off-topic for this Stack. – jcm Nov 4 '18 at 0:02
  • I guess it's because I'm a finance-muggle, so I don't see what you're referring to. Seems like a money thing to me.... – user78604 Nov 4 '18 at 0:04
  • 1
    Agree that this may be off-topic as this would be commercial law (business to business) and not personal finance. OP might have better luck with law.stackexchange.com if worded correctly. – Morrison Chang Nov 4 '18 at 0:05
  • If this question isn't a good fit, can you move it there for me please/thanks? The system kept thinking this was spam and that I was a robot (I'm not), so it was painful to post. – user78604 Nov 4 '18 at 0:07
  • 3
    I'm voting to close this question as off-topic because it is not about personal finance. – Chris W. Rea Nov 4 '18 at 3:29
-1

Most of the answers to your question seem to be contained in your question. Why would payment processors drop or cause difficulty for their clients?

  • Political risk. Social media has facilitated mob mentality with respect to politics and business and there are many customers willing to boycott them and many media sites willing to rake them over the coals for facilitating politically unpopular clients. Bad PR is costly for these types of businesses.
  • Political preference. Executives making these decisions have their own political/social preferences and are sometimes willing to enforce them on others even when doing so is not optimal for their bottom line. This is especially true for private companies or newer companies, where top executives still retain a large fraction of the ownership of the firm and may not be concerned about investor backlash.
  • Legal risk. Regulations and legal action brought against gun companies often target financial intermediaries even if what they did was not illegal at the time. Even if the processors win these battles, it is costly to do so.

While targeting gun companies and related business seems offensive on constitutional grounds, it's not viewed as very costly by the payment processors. There is a perception that gun companies and their supporters are not particularly litigious nor do they have the same capability to enforce their preferences through bad PR. All but very specialized media outlets are anti-gun, so causing problems for gun companies poses little risk of causing the marketing nightmare that continuing to work with them could.

Not the answer you're looking for? Browse other questions tagged or ask your own question.