On the money-transfer platforms PayPal and Venmo, users can transfer cash to someone for “the kidnapping,” “cocaine,” “wire fraud” or to the “KKK,” but they’ll have trouble making their exchange for, say, a “Cuban sandwich.” That’s because unlike “AK-47,” “anthrax” or “assassination,” the word “Cuba” is included in a list of keywords the company considers potentially suspect when written in the memo.
On Wednesday, the quarterly magazine Jewish Currents tweeted that it attempted to pay nine freelance journalists for articles written about Iran but ran into some issues because the memo included the name of the Middle Eastern country, which is also on PayPal’s suspicious words list.
Nine paychecks of JC staff and contributors are currently being held by PayPal.
— Jewish Currents (@JewishCurrents) February 5, 2020
The magazine, which posted a screenshot of the message it received from PayPal, was asked to provide an explanation for the Iran reference as well as the purpose of the payment in order for the transfer to be made.
The encounter caught the attention of the online publication Slate, which reported on PayPal’s flagging system. According to the news outlet, PayPal, as well as its subsidiary Venmo, “uses a system that automatically flags keywords in the payment memo field that could indicate a violation of U.S. sanctions.” For instance, if PayPal’s system detects one of the words on its list being used, it will send an email to both the sender and receiver that says, “To comply with government regulations, PayPal is required to review certain transactions. The payment you sent is currently being reviewed and we will complete this process within 72 hours.”
The online magazine did some original research, with writer Aaron Mak sending their editor several 1-cent transitions with different memo descriptions. They found that the company has a strict policy when it comes to words being used that have something to do with foreign sanctions, including Cuba, Los Zetas, Shining Path, Iran, Persian, Syria, North Korea, ISIS, Kim Jong-un, Bashar al-Assad and more, but not so much when it comes to drugs, weapons, human trafficking and white supremacy, with words like “weapons of mass destruction,” “hitman,” “Glock 43,” “heroin,” “Unite the Right,” “Klansmen,” “David Duke” and more acceptable.
“PayPal takes its regulatory and compliance obligations seriously, including U.S. economic and trade sanctions administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC),” PayPal told Slate in a statement. “Our goal is to deliver as seamless of a payments experience as possible while we do our job in making sure payments made on our platforms comply with applicable law. We realize any delay in making or receiving a payment can be frustrating, and we appreciate our customers’ patience as we comply with our regulatory obligations.”
With the term “Cuba” flagged on PayPal and Venmo, just sending a friend some money for the “Cuban sandwich” you ate for lunch, the drinks you downed at “Cuba Libre,” the entry fee for the “Cuban bar/club” you danced at, the purchase of “Cuban-inspired” art or music, or just that special something you want to gift your “favorite cubana” will be anything but “seamless.”