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Payments Firms Cancel Accounts for White Supremacist Groups After Charlottesville Violence
August 16, 2017

By Jim Daly

In the wake of violent clashes last weekend between white supremacist groups and counter-demonstrators in Charlottesville, Va., payments companies are cutting off access to their systems that supremacist groups use to accept donations.

Pressure on the payments firms began building not long after a female counter-demonstrator was fatally struck by a car allegedly driven by an white supremacist from Ohio, and two Virginia state troopers monitoring the demonstrations from the air died when their helicopter crashed. Care2, a social network for activists, is circulating a petition asking Visa Inc. and Mastercard Inc. to block transactions for the Web site of white supremacist David Duke, a former leader of the Ku Klux Klan. More than 4,000 people had signed the petition as of Wednesday morning, Care2 says.

Visa and Mastercard need to work with merchant acquirers, the entitities that actually sign businesses for card acceptance, if they detect violations of laws or network rules and policies.

A Visa spokesperson says by email that in recent months, “concerned organizations provided Visa an extensive list of Web sites, including hate sites, religious organizations, and political groups, that they find offensive.” Visa and its financial-institution clients “determined that a number of these sites were not adhering to those financial institutions’ acceptable use policies and/or were engaging in illegal activities. For this reason, these sites are no longer able to accept Visa payments.”

The spokesperson adds that “Visa does not, however, restrict transactions that are legal and involve free speech or lawful expression of views, even if we may find the organization or its positions to be offensive.”

In an e-mail to Digital Transactions News, a Mastercard spokesperson says “we have reviewed a comprehensive list of Web sites provided by civic leaders and others. We are shutting down the use of our cards on sites that we believe incite violence, as well as those who are wrongfully suggesting they accept our cards, when in fact they don’t.” The spokesperson did not say which sites Mastercard was cutting off.

A spokesperson for Riverwoods, Ill.-based Discover Financial Services says by email that “in light of recent events, we are terminating merchant agreements with hate groups, given the violence incited by their extremist views.” The spokesperson did not identify the groups.

On Tuesday, The Southern Poverty Law Center, a Montgomery, Ala.-based civil-rights group, posted a report on its Web site Tuesday stating that PayPal Holdings Inc. “was integral in raising money to orchestrate the event. Organizers, speakers, and individual attendees relied on the platform to move funds in the run-up to the ultimately deadly event.

“Despite the company’s acceptable use policy explicitly banning ‘the promotion of hate, violence, [and] racial intolerance,’” various organizers and attendees were allowed to use PayPal’s before and after the Charlottesville events, the post continues, citing several.

Franz Paasche, senior vice president of corporate affairs and communications, wrote Tuesday on PayPal’s blog that “PayPal strives to navigate the balance between freedom of expression and open dialogue—and the limiting and closing of sites that accept payments or raise funds to promote hate, violence and intolerance.”

A PayPal spokesperson did not respond to a Digital Transactions News request for comment, but a media report said the firm would bar about three dozen users from its platform. Paasche’s post said PayPal has a “longstanding, well-defined and consistently enforced acceptable use policy” that aims “to ensure that our services are not used to accept payments or donations for activities that promote hate, violence or racial intolerance.”

Payments consultant Richard Crone, principal at San Carlos, Calif.-based Crone Consulting LLC, says the attention cast on the payments industry about how illegal activities are funded “is nothing new.” The know-your-customer provisions in the USA Patriot Act, he notes, prohibit funding of illicit activity.

“This is a chance for a payment brand to demonstrate a corporate conscience,” Crone says by email. “It is a marketing opportunity like any other good public-relations positioning.”

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