If the story as told in the Independent is accurate in all respects, Paypal owes an apology to Laurence and Philippa Beardmore, owners of the York Coffee Emporium. The company, purchased by the Beardmore’s just last year, has been doing a thriving internet retail business selling coffees imported from around the world, with many transactions processed through the USA- based payment giant Paypal.
According to the report, on 19 April, with no previous notice, Paypal froze the company’s account, refusing to transfer any funds coming in or going out. About half the Coffee Emporium’s business had been going through Paypal, and that part was effectively shut down, costing the Beardmore’s a lot of orders and damaging the company’s reputation with both suppliers and customers.
The reason given was that Cuban coffee was being sold, and Paypal as a U.S. company was obliged to comply with U.S. government-imposed sanctions on Cuban goods, which have been in place since the early 1960’s. Even though the Coffee Emporium does not operate in nor sell its good to the the US., the restriction still applies as far as Paypal is concerned.
Mr. Beardmore told the Independent that Paypal’s move had shut down half their online operations, and it didn’t help that a message was sent to customers that the account had been frozen, resulting in consternation and loss of confidence, ie, damage to the company’s reputation.
Cuban goods, including coffee, are not banned in the UK; the Beardmore’s base of operations is in Nether Poppleton (near York) where the beans are roasted and packaged for shipment. This action on the part of Paypal has raised some hackles, and observers are wondering if it might not damage Paypal’s reputation as well.