VPN Providers Whip Up Sound and Fury

by Mercator Advisory Group 0

A July 3 article from tech blog TorrentFreak reported Visa and MasterCard have blocked service to VPN providers as a result of the card companies’ “fight against privacy.”

While the facts of the case may not be completely apparent, one thing is sure: the decisions behind the blocking of payment services to any merchant is not well understood by tech media, nor by the public at large.

The VPN provider that is the subject of the post (iPredator, founded by Pirate Bay’s Peter Sunde) had its card payment processing terminated by Payson, a Swedish payment service provider, not by Visa or MasterCard. Updates to the blog post indicate these denials. Business decisions occur frequently in the merchant services business to discontinue payment processing services to some merchants and some merchant categories, but it is rarely at the behest of any of the major card networks.

From the article:

Following the introduction of restrictions against file-sharing services, Mastercard and Visa have reportedly started to take action against VPN providers. This week, Swedish payment provider Payson cut access to anonymizing services after being ordered to do so by the credit card companies. VPN provider iPredator is one of the affected customers and founder Peter Sunde says that they are considering legal action to get the service unblocked. Payment providers are increasingly taking action against sites and services that are linked to copyright infringement. There’s an unwritten rule that Mastercard and Visa don’t accept file-hosting sites that have an affiliate program and PayPal has thrown out nearly all cyberlockers in recent months.

One of these customers is the iPredator VPN, launched by Pirate Bay co-founder Peter Sunde and friends. Sunde tells TorrentFreak that he is baffled by the decision, which he believes may be an effort to prevent the public from covering their tracks online and preventing government spying.

“It means that US companies are forcing non-American companies not to allow people to protest their privacy and be anonymous, and thus the NSA can spy even more. It’s just INSANE,” Sunde says.