Paypal Holdings Inc (NASDAQ:PYPL) Teams Up With Netflix, Inc. (NASDAQ:NFLX) Against VPNs


Paypal Holdings Inc (NASDAQ:PYPL) has initiated a crackdown on people using rogue virtual network providers (VPN) to gain access to content from Netflix, Inc. (NASDAQ:NFLX) that is not available in their regions.

Netflix launched a similar hunt a month ago, but VPN providers decided to retaliate by providing new solutions to rise against the barricades placed by the streaming service. PayPal’s involvement in the crackdown is an added advantage for Netflix because it will strengthen the fight against VPNs.

According to VPN provider, TorrentFreak, PayPal has terminated the payment services for Netflix to at least one VPN provider. The Canadian VPN provider did not reveal the number of VPNs that were affected. It did, however, state that the online payments firm did not issue any prior notice before severing the ties.

PayPal’s move targets users who have been accessing content illegally through copyright violation. A spokesperson from the firm stated that it has to comply with laws placed by regulatory agencies and governments since it is an international payments company. The Spokesperson further added that the company does not allow transactions that violate proprietary rights including copyrights. VPNs make it harder for governments and organizations to track online activity to the user’s location because they use encrypted Internet connections.

Rogue users on Netflix take advantage of the encrypted connections by changing their IP address so that they can appear to be from other regions. These users often do this in cases where they can’t access various shows from their region. Once they switch the IP address, they quickly gain access to content that would be otherwise limited to other areas.

Unfortunately, there is a downside to PayPal dropping support for VPNs. People who use PayPal will no longer get to use VPNs on the online payment service regardless of their reason for wanting to do so. This will make it tough for VPN providers to find a loophole. Either way, it is a win-win situation for both Netflix and PayPal.