PayPal ends business relationship with Mega

Is history repeating itself? Mega just announced that the payment processing platform PayPal has ended its business relationship with the cloud storage provider.

PayPal, which had a business relationship with Megaupload as well in the past up until its closure by US authorities, banned several large file hosting services in the wake of the takedown and changed its acceptance requirements for these type of sites as well.

We have access to Mega's side of the story now only. According to the company, the post is published by a user called Admin, PayPal ceased processing Mega payments citing "unknowability of what is on the platform" as the reason for doing so.

This is a reference to the encryption used by Mega which prevents the site or third-parties from knowing what users upload, host or share on the site.

PayPal seems to have requested access to the backend of file hosters in the past to monitor all files that are uploaded and download on these sites according to reports by affected services.

According to Mega however, the reason for ending the business relationship was pressure by Visa and MasterCard which in turn were pressured by US Senator Leahy to "cease providing payment services" to companies listed in a report as not providing "legitimate cloud storage" services.

Mega's is currently without payment provider which you will notice when you try to upgrade your account or renew it. An error message is displayed instead when you open the resellers page or try to order one of the available packages offered by the site.

Mega noted in the blog post that it won't enforce payment-related storage limits or suspensions for the time being and has extended all existing subscriptions by two months free of charge.

This should be enough time for the company to find another payment provider for its service even though it is likely that some may have the same objections as PayPal.

Information about files hosted on the site were published in the same article. According to the information posted by Mega, only 0.0.11% of all files were taken down in the fourth quarter of 2014.It is clear that Mega needs to find another payment processor as soon as possible as subscriptions are the only income source of the service currently.

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