Credit Cards Boost Efforts To Remove Hate Groups -- WSJ
August 19 2017 - 3:03AM
Dow Jones News
Tech firms cut off right-wing extremists' website support and
social-media accounts
By Peter Rudegeair and AnnaMaria Andriotis
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 19, 2017).
Payments and credit-card companies including American Express
Co., Discover Financial Services and PayPal Holdings Inc. are
booting dozens of individuals and groups associated with right-wing
extremist movements off their systems following violence at a
white-nationalists' rally in Charlottesville, Va.
The actions, many of which were taken after finding the websites
had violated the financial firms' acceptable-use policies, make it
more difficult for the groups to sell merchandise or raise
donations from supporters. Racial-justice organization
ColorOfChange.org and others have pushed payments companies to take
a more aggressive role in policing the transactions that run
through their systems.
In response to recent events, PayPal has revoked access from
more than 40 websites that violated those terms, according to a
person familiar with the matter.
Decisions to cut off access to white-supremacy groups have also
been made by technology companies. Alphabet Inc. and GoDaddy Inc.
revoked the hosting support for a neo-Nazi website and Facebook
Inc. and Twitter Inc. have suspended accounts affiliated with white
nationalists.
An AmEx spokesman said that the company has been reviewing a
list of websites of hate groups compiled by Color of Change and
that it found the majority don't accept its cards. It has sent
cease and desist letters to the sites that are using its logo and
is reviewing the sites that actually accept AmEx cards. The
spokesman added that the company maintains "the right to terminate
any merchant relationship that is harmful to our brand."
Franz Paasche, PayPal's senior vice president for corporate
affairs and communications, wrote in a blog post Tuesday that the
San Jose, Calif.-based company "will always remain vigilant and
committed to ensuring that our platforms are not used to perpetuate
hate and violence or racial intolerance."
Discover said in a statement that "in light of recent events"
the company is "terminating merchant agreements with hate groups,
given the violence incited by their extremist views." Roughly a
couple dozen websites will likely be affected by Discover's move,
according to a person familiar with the payments industry.
American Express, Discover and PayPal occupy two main roles in
the payments industry: they issue consumer accounts that can be
used to make purchases and handle the processing of payments for
businesses . The second activity, known in the industry as
"merchant acquiring," is what has come under more scrutiny in
recent days.
When opening a new merchant account, a business agrees not to
engage in a range of illegal activities. Some payments firms also
prohibit their customers from legal activities that may carry
higher risks, such as selling money orders or traveler's
checks.
Hate groups that find they aren't able to accept credit card
payments, however, can rebrand under different names, potentially
allowing them to receive payments again until the acquirers
terminate the relationship.
The violence in Charlottesville this past weekend hasn't
prompted big changes to payments companies' acceptable-use
policies. But it has called attention to websites that could be
violating those terms.
Additionally, the networks through which credit-card
transactions are routed, such as Visa Inc. and Mastercard Inc., say
they have always taken a tough stance on hate groups that incite
violence or illegal behavior. They use a mix of proprietary
technology and monitoring to keep tabs on illegal activities.
However, the networks generally need to work with the merchant
acquirers to pull the plug. Visa for example, working with
acquirers, has been terminating relationships with extremist groups
on an ongoing basis in a process that predates last weekend's
events.
In March and May, the company received letters from Color of
Change that identified names of websites that they find offensive.
A Visa spokeswoman said "a number of these sites were engaging in
illegal activities" or violated the terms of their banks'
acceptable use policies and they are no longer able to accept Visa
payments.
Some networks and acquirers say it is difficult to shut down
payment processing due solely to distasteful comments on company or
group websites. Rather, one of the most common grounds for stopping
payment services, according to a major acquirer, is that a group
misrepresented itself when it signed up for services. A firm also
gets kicked off for encouraging illegal or violent behavior.
A Mastercard spokesman said the company reviewed a list of
websites provided by civic leaders and others and is "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."
Write to Peter Rudegeair at Peter.Rudegeair@wsj.com and
AnnaMaria Andriotis at annamaria.andriotis@wsj.com
(END) Dow Jones Newswires
August 19, 2017 02:48 ET (06:48 GMT)
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