It appears that PayPal is no kind of pal to a lot of users in China.
Many Chinese cross-border merchants have decided to stop using the online payment service, claims a Shenzhen-based retailer, because money in their PayPal accounts was seized by U.S. courts following a number of lawsuits.
According to one retailer, whose surname is Lin: “I dare not use PayPal any more. Now I turn to banking transfer, which is safer and more reliable.”
Lin told The Global Times that all the money in his PayPal account, close to $6,500, was transferred out by PayPal due to a U.S. court judgment that ruled that Lin had infringed True Religion’s (a U.S. company) trademark. What had happened was that in October 2014, a foreign client contacted a friend of Lin’s about buying counterfeit True Religion pants and insisted on conducting the transaction via PayPal. Lin’s friend did not have a PayPal account so he borrowed Lin’s account, which was frozen by PayPal in December, although no counterfeit deals had been made at that time or any time afterward.
Lin is not alone. According to another Shenzhen-based PayPal user — whose surname is Li and who manages a QQ group set up to help deal with similar complaints — to date, an estimated 5,000 PayPal accounts in China, containing hundreds of millions of U.S. dollars, have gotten frozen since April 2014. Li acknowledges that some of the Chinese users involved were indeed selling knockoff goods online, but others had been cheated.
Besides Li’s group, there are also several others on QQ.
PayPal maintains that its actions as the third-party online payment platform were in compliance with the U.S. courts’ orders. Regardless, these incidents have already caused the company to suffer an outflow of Chinese users, and the trend shows no signs of slowing.