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Maybe they're doing us all a favour.
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In the immortal words of (hell I don't know who to attribute it to): "Don't do me no favors."
... and your first instinct is usually correct.
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PP is taking a stand, facing up to their critics, and risking losing business. Sounds like a highly principled company to me!
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There's no
principles involved here. PayPal is taking pressure that's being exerted on them by bigger fish and simply punting it to the next smaller fish in line.