Anonymous, LulzSec vs. PayPal: eBay's cash cow in the crosshairs

Anonymous and LulzSec have declared war on eBay's PayPal and have urged a boycott of the payment service and the fallout could have some real financial implications.
Written by Larry Dignan, Contributor

Anonymous and LulzSec have declared war on eBay's PayPal with a boycott of the payment service and the fallout could have some real financial implications.

In a post on PasteBin, Anonymous and LulzSec took aim at the FBI, which has reportedly been working off a PayPal list of up to 1,000 IP addresses. The FBI launched a cross-country raid of alleged attackers and netted a few arrests.

Not surprisingly, Anonymous and LulzSec are urging a legal boycott of PayPal. The groups said:

In recent weeks, we've found ourselves outraged at the FBI's willingness to arrest and threaten those who are involved in ethical, modern cyber operations. Law enforcement continues to push its ridiculous rules upon us - Anonymous "suspects" may face a fine of up to 500,000 USD with the addition of 15 years' jail time, all for taking part in a historical activist movement. Many of the already-apprehended Anons are being charged with taking part in DDoS attacks against corrupt and greedy organizations, such as PayPal.

The antisec groups then urge folks to close down PayPal accounts. "PayPal's willingness to fold to legislation should be proof enough that they don't deserve the customers they get. They do not deserve your business, and they do not deserve your respect," said LulzSec and Anonymous.

Clearly, Anonymous and LulzSec have moved from hacktivism to activism and if successful a PayPal boycott is going to hurt eBay. Why? Three reasons:

eBay CEO John Donahoe gushed about PayPal and the possibilities. Donahoe talked growth:

PayPal has over 100 million active users and serves 9 million merchants worldwide. This provides a powerful foundation for attractive, sustainable growth. PayPal's merchant services business continued its strong growth momentum in all regions of the world.

Donahoe talked mobile:

PayPal mobile also continues to accelerate. While others talk about the promise of mobile payments, PayPal is delivering. An estimated 8 million people are now using PayPal mobile and we expect mobile payment volume to exceed $3 billion this year. That's more than four times the volume we did in 2010.

And Donahoe talked about putting PayPal into your friendly neighborhood cash register.

With our strong position and growth momentum in online payments, we plan to extend PayPal's capability to point of sale locations. We intend to help retailers grow their businesses offline in the same way we helped merchants grow online around the world. By the end of this year, we expect PayPal to be testing Point of Sale innovation with a major US retailer. And during 2012, we expect to be rolling out new Point of Sale experiences with up to 20 national retailers.

In other words, eBay is becoming PayPal as other parts of the business mature.


Now let's spin this forward. Should Anonymous and LulzSec succeed with a boycott it could knock PayPal down a few pegs. Meanwhile, security issues could diminish confidence in PayPal. Simply put, payment systems are a lot like banks. They only function if there's confidence in the model and security.

Add it up and the Anonymous and LulzSec storyline remains interesting and newsworthy. But the now the table stakes are much higher. There are billions of dollars potentially at stake.


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