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PayPal boots accounts based on its beliefs: PR pros on the impact to its brand reputation

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By Kendra Clark | Senior Reporter

September 22, 2022 | 8 min read

PayPal is cutting ties with users and organizations with socio-political beliefs that don’t align with its values. While some experts see the approach as a shrewd strategy, others say it could harm consumers’ trust in the brand.

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PayPal is cutting ties with organizations whose values it disagrees with / Muhammad Asyfaul

Reports surfaced yesterday indicating that digital wallet and payment platform PayPal has shut down a number of “gender-critical” accounts. It axed an account belonging to Gays Against Groomers, an organization that describes itself as a “coalition of gays against the sexualization, indoctrination and medicalization of children.” More notably, PayPal booted British columnist and social commentator Toby Young, as well as accounts belonging to his interest group the Free Speech Union and his website the Daily Sceptic.

PayPal cited violations of the platform’s user policies – including hate speech – for the decisions, but many, including Young and his supporters, believe that the decision was politically calculated.

Young, whose Free Speech Union has campaigned against schools teaching gender studies and has come under fire for spreading misinformation about Covid, called PayPal’s decision “a new low in big tech’s war on free speech” in a tweet sent Wednesday.

PayPal appears to be in the midst of a large-scale crackdown. On Tuesday, the platform threatened to dissolve a deal with NBA team the Phoenix Suns if Robert Sarver – the franchise’s owner, who is currently embroiled in a scandal involving allegations of widespread racism and misogyny on the team – did not sell the organization. On Wednesday afternoon, under growing pressure, Sarver announced plans to sell.

It’s clear that PayPal is taking a hard stand against organizations and public figures whose values don’t align with its own. A PayPal spokesperson told The Drum: “PayPal has a long-standing and consistent Acceptable Use Policy. We take action when we deem that individuals or organizations have violated this policy.”

Although the brand has made some public moves that support its values (in the aftermath of the Roe v Wade reversal, it pledged to fund travel for employees’ reproductive care, for example), it hasn’t been especially loud on any hot-button social or political issues. Nor has it made a point to build up marketing or messaging around its values. It’s largely taken a quiet approach.

Some public relations experts see this as a tactical move. “This is strategic,” says Dini von Mueffling, who runs an independent PR firm in New York and often advises brands on navigating social crises. She suggests that by quietly booting users from its services like it’s done to Toby Young, “it forces the issues to get resolved more quickly and is more effective than just stating one’s values.”

And von Mueffling, for her part, sees the approach as effective and admirable. “They’re putting their money where their mouth is. And it encourages other big brands to follow suit.”

Other PR pros are in agreement that the approach reflects well on the payment platform. “PayPal has a long history of leaning on its values to drive business decisions,” says Aaron Kwittken, founder and chairman at strategy and PR agency KWT Global and president at the New York Chapter of the Public Relations Society of America. “Removing or disassociating with accounts that are contrary to the company’s values demonstrates a true authenticity behind its commitment to stakeholder capitalism.” On the other hand, he says, “making grand statements could be perceived as virtue signaling and ESG-washing.”

‘This is what gets brands in trouble’

But it’s a fine line to toe. Skeptics point out that acting on or enforcing corporate values quietly may make a brand look inconsistent or inauthentic. “While there have been brands – like Patagonia – that have been very vocal on their [social and political] positions ... brands that try to do things quietly seem to make more noise than if they just stated their position and rationale openly,” says Dr Karen Freberg, a professor of strategic communications at the University of Louisville.

Freberg suggests that failing to be explicit about corporate values can diminish consumers’ attitudes toward a brand. “This is what gets brands into trouble in terms of their trust and overall relationship with audiences and customers.”

A third camp of experts falls somewhere in the middle, arguing that, as founder and president of market research firm Brand Keys Robert Passikoff puts it, the decision to sever ties based on allegations of racism and misogyny is “one of those mostly harmless stands,” considering that most audiences won’t feel alienated by the move. “It’s hard to argue in favor of racism, sexism or any form of discrimination,” he says.

But making business decisions based on social and political values can, of course, also be self-serving. It’s worth noting, for example, that PayPal’s contract with the Suns is set to expire at the end of this NBA season. For the platform, then, threatening to cut ties at this point in time was “a win-win,” says Passikoff, because it either helped accelerate Sarver’s exit or put them in a nice position to run out the clock. “It’s all very rational ... and by and large costs [PayPal] nothing,” Passikoff says. (Whether PayPal will stick around now that Sarver has agreed to sell remains to be seen.)

Getting values-based messaging right

Regardless of the respective scandal or social or political issue, brands are facing more pressure than ever to get their values-based messaging right. Data from Kantar indicates that 68% of consumers think it’s important for brands to take a position on social and political issues. When they do so, however, they’re almost always risking the loss of brand favorability and loyalty among some audiences. “Brands today are placed between a rock and a hard place – whatever they do, whatever they say or even stand for, they are going to make some people happy and others really upset,” says Freberg. It’s important, she says, that brands have a well-developed strategy for navigating divisive issues with various audiences in mind.

And at least some believe that PayPal has gotten it right. “Companies should not succumb to reactive partisanship,” says KWT Global’s Kwittken. “Not every issue has to be politicized. [But these issues] should be humanized – and PayPal is doing just that. PayPal and its CEO Dan Schultz are leaders when it comes to integrating values into business decisions. I hope that others will follow its lead.”

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