The Greek crisis has come to PayPal.
In tandem with limits imposed by the Greek government earlier this month on how much citizens can withdraw from their bank accounts, PayPal has been hobbled, according to Quartz. That’s due to the fact that the service draws payments from banks accounts and credit cards.
Quartz quoted PayPal via an unnamed spokesman as stating that due to “recent decisions of the Greek authorities on capital controls, funding of PayPal wallet from Greek bank accounts, as well as cross-border transactions, funded by any cards or bank accounts are currently not available. We aim to continue serving our valued customers in Greece in full, as we have for over a decade.”
As has been widely reported, capital controls instituted by the Greek government amid the bank holiday — and a weekend referendum on a bailout plan — has limited withdrawals from bank accounts. That amount has been capped at 60 euros daily. Yet that might change when banks reopen, an event scheduled for July 7.
In a Friday (July 3) update, Quartz reported that “some services, including receiving payments, remain available in Greece. However, funding PayPal wallets from Greek bank accounts, cross-border transactions and certain payment attempts remain unavailable for now.”
Quartz said the PayPal curtailment illustrates how much the service and its financial technology peers are “reliant on the traditional institutions they were created to disrupt. The truth is, there’s an old-fashioned bank at the heart of nearly every financial startup meant to pit the old guard out of business.”
By way of example, Quartz cited peer-to-peer lenders such as Lending Club, which do not hold loans on their own balance sheets. Those loans are issued by WebBank, based in Utah. And in another example, Coinbase, the bitcoin wallet service, uses Silicon Valley Bank in California to transfer bitcoin into various currencies, including the U.S. dollar.
In the meantime, Seeking Alpha noted Friday that bitcoin is seeing renewed momentum. The rate of new customer deposits, at a minimum of €50 with BTCGreece, jumped by 400 percent between May and June. And, noted Seeking Alpha, the average deposit with the cryptocurrency quadrupled to around €700.