PayPal
Flagged · AvoidDigital payments giant whose Honey extension was caught stealing affiliate commissions, which freezes customer accounts without cause, and faces multiple regulatory investigations.
Last updated June 14, 2026
↓ Skip to 7 ethical alternativesReasons to avoid
Issues span:ConsumerPrivacy
- PayPal's Honey browser extension was documented replacing creators' affiliate tracking links with its own at checkout, diverting commissions from the influencers who drove the sales. Creators reported their affiliate income plummeting even as their audiences grew.
- PayPal has frozen customer accounts for up to 180 days without explanation and in some cases permanently seized the funds. One user of 22 years said PayPal took $26,984 from her account six months after freezing it, without ever telling her why.
- The CFPB opened investigations into PayPal and Venmo over unauthorized fund transfers, collections practices, and the marketing of PayPal Credit in connection with educational services.
- A 2022 data breach compromised the personal information of approximately 35,000 users, leading to a class action alleging PayPal failed to adequately safeguard customer data, leaving victims exposed to identity theft.
- In 2022, PayPal quietly added a policy allowing it to fine users up to $2,500 for content deemed "harmful" or spreading "misinformation" — at its sole discretion. After public backlash it claimed the change was sent "in error," but critics noted similar language later reappeared in updated terms.
Ethical alternatives
Send Money to Friends & Family
Business & Merchant Payments
Savings & Banking
Local Credit Unions
Member-owned, not-for-profit institutions. A safer place to hold your money than a digital wallet — with actual NCUA deposit insurance.
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Climate First Bank
A B Corp and Fossil Free Certified bank offering checking and high-yield savings you can open online nationwide, with deposits kept out of fossil fuels.
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Beneficial State Bank
B-Corp certified bank focused on social and environmental responsibility.
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Visit →Common Questions
- Is PayPal ethical?
- PayPal's Honey browser extension was documented replacing creators' affiliate tracking links with its own at checkout, diverting commissions from the influencers who drove the sales. PayPal has also frozen customer accounts for up to 180 days without explanation and in some cases permanently seized funds, with one user of 22 years losing $26,984 from her account without ever being told why.
- Why should I avoid PayPal?
- The CFPB opened investigations into PayPal and Venmo over unauthorized fund transfers and deceptive marketing practices. A 2022 data breach compromised around 35,000 users and led to a class action alleging PayPal failed to adequately protect customer data. PayPal also quietly attempted to add a policy allowing it to fine users up to $2,500 for content it deemed harmful, at its sole discretion.
- What are the best ethical alternatives to PayPal?
- Zelle is a bank-backed transfer service with no fees and no middleman holding your balance. Cash App from Block offers free peer-to-peer payments without the account freeze history. Wise offers transparent mid-market exchange rates especially for international transfers. For small businesses, Stripe and Square offer transparent pricing without vague enforcement policies.