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Severity
50 / 100▼5
ACUTEpeak 57ranked #16 of 42people’s rank #20 · preview
Case 016 · Fintech · Admitted 2021
The Enshittification of PayPal
The Enshittification of PayPalPayPal raised US merchant transaction fees in 2021 and has faced recurring litigation over freezing user accounts and seizing funds without explanation. In 2022, the company published and then retracted an acceptable use policy update that would have allowed $2,500 fines for spreading misinformation, calling the language an error. In 2024 it launched an advertising business built on transaction data from roughly 400 million accounts, and its Honey coupon extension became the subject of class action lawsuits alleging it substituted its own tracking tags for creators' affiliate links at checkout, claims PayPal has disputed in court.
First symptom
Jun 2021
Symptoms on file
6
Categories
4
Prognosis
Acute
2 quality · 1 pricing · 2 ads · 1 lock-in
Alternatives
The Paper Trail
| Date | Category | Symptom · rating · source |
|---|---|---|
| 2021-06 | pricing | US merchant fees raised to 3.49 percent plus 49 centsPayPal announced that effective August 2, 2021, fees for US merchants accepting PayPal and Venmo branded payments would rise from 2.9 percent plus 30 cents to 3.49 percent plus 49 cents per transaction. The company framed the change as reflecting the value of its checkout products.↳ PayPal Newsroom |
| 2022-01 | lock-in | Class action filed over frozen accounts and seized fundsThree PayPal users filed a proposed federal class action accusing the company of freezing accounts and seizing balances, in amounts up to $172,000, without explanation or due process, including claims under racketeering laws. The plaintiffs said PayPal held funds for months before permanently taking them.↳ Engadget |
| 2022-10 | quality | $2,500 misinformation fine policy published, then retractedPayPal's updated Acceptable Use Policy, slated for November 2022, listed promoting 'misinformation' among violations subject to $2,500 in liquidated damages per offense. After widespread backlash, the company removed the language and said it 'was never intended to be inserted in our policy.'↳ Fortune |
| 2024-05 | ads | PayPal Ads platform built on user transaction data announcedPayPal announced an advertising platform that uses transaction data from its roughly 400 million active accounts, covering nearly half a trillion dollars in payments, to power AI-driven targeted offers and ads for merchants. The company hired former Uber Advertising executive Mark Grether to lead PayPal Ads.↳ Payments Dive |
| 2024-12 | ads | Honey extension accused of taking creators' affiliate commissionsAn investigative video by YouTuber MegaLag alleged that PayPal's Honey coupon extension replaced creators' affiliate tracking links with its own at checkout, redirecting commissions from the influencers who referred the sale, even when no coupon was applied. Honey reportedly lost about 3 million of its 20 million users in the weeks after the allegations.↳ The Washington Post |
| 2025-01 | quality | Class actions over Honey commission practices consolidate in federal courtSeven proposed class actions filed in federal court in San Francisco since late December 2024 alleged that PayPal Honey diverted affiliate commissions owed to content creators by claiming last-click attribution. PayPal disputed the claims, and the cases were consolidated for litigation.↳ Local News Matters |
The Wall
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<a href="https://enshittification.xyz/paypal"><img src="https://enshittification.xyz/badge/paypal.svg" alt="PayPal on the Enshittification Index"></a>The Enshittification Index · 42 case files · no source, no entry · updated Jun 2026
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