How PIPA and SOPA Could’ve Effected Credit Card Processing Companies

April 21, 2012 by  Filed under: Credit 

SOPA or the Stop Online Piracy Act is a bill that could permanently alter the face of the Internet, merchant services and small business. Along with PIPA or the Protect IP Act, they have the potential to damage businesses. These bills have the potential to negatively affect businesses and other organizations that rely on the Internet disseminating information freely. PIPA is a provision that is designed to stop piracy of copyrighted content such as movies and music. President Obama recently said that he would not support SOPA in its current form, but PIPA is still being debated. Processing credit cards may never be the same if this legislation is allowed to pass.

If PIPA were passed into law, it would be a tool that could easily be used to destroy small businesses and online merchants. Any other business could claim that a website has copyrighted material on it or has a link to copyrighted material. At that point, the accuser could simply file a complaint with a court and then get an order to shut down the website until everything is sorted out. In the meantime, the website would miss out on any revenue while trying to wade through the bureaucratic mess that would ensue.

In addition to shutting down a particular website, PIPA legislation would require companies that engage in processing credit cards to stop accepting payments for offending parties. Advertising programs like Google AdSense would have to shut down ads on the offending sites as well.

This law could completely change the landscape of businesses that engage in processing credit cards. This could result in a large amount of red tape that must be dealt with in order to continue credit card processing. For example, if you have a customer that regularly uses your company to process credit cards and that business is accused of hosting copyrighted material on its website, you would no longer be able to help with credit card processing for that company. This will devastate that company and hurt your own revenue as you will be unable to engage in processing credit cards.

Another potentially negative side effect of this legislation is that it could hurt businesses that rely on e-commerce. If a competitor wanted to hurt a particular business, it would only have to file a complaint against it. Then the competitor’s website could be shut down or force them to stop credit card processing. Without credit card processing capabilities, most online businesses would cease to exist. In many cases, this could take months or years, which would put many e-commerce companies out of business.

This legislation may have many negative consequences for small businesses and merchant services. Many small businesses rely on innovation and the free flow of information online to help build their own businesses as well as free access to merchant services accounts. If PIPA were in effect, larger corporations could simply spend money to abuse the legal system and put these smaller competitors out of business. This legislation essentially allows accusers to shoot first and ask questions later. If companies such as Facebook or Google were created while this legislation was in place, they may have been sued out of existence by bigger competitors as they wouldn’t have had access to merchant services or any other income. This has the potential to keep small businesses from growing or being successful, while propping up bigger corporations and media companies that produce copyrighted material.

Due to the highly controversial nature of this legislation, many online companies have come out in protest of the bill. Companies like Google, Facebook, Twitter, Wikipedia and Reddit have joined together to protest. Currently, the debate rages on and both sides have a lot of power behind them. The fate of the Internet and small businesses could rest on the decision of Congress.

Trip Ochenski handles the customer support at Switch Commerce, and also writes blogs pertaining to mobile credit card processing and ATM services.

Article Source:

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!

You must be logged in to post a comment.

Prev Post:
Next Post: