PayPal Requires Seafile to Verify Users’ Stored Data

Seafile, a German online storage system that can also be installed on its own server with open source software, is no longer allowed to accept PayPal transfers because it does not want to monitor the files and traffic of its customers.

The reason for the conflict seems to lie in the fact that PayPal qualifies the service as a file sharing or torrent service, which goes against the terms of the payment service. Due to the conflict, customers are temporarily unable to create a paid account with the service. Until another payment provider is found or until the problem with PayPal is resolved, Seafile will provide its services free of charge.

A German lawyer commented on Chip.de that PayPal’s claim goes against European regulations. In a blog on its own Seafile.de site, the company says it has contacted PayPal and that the response was initially surprised. The PayPal representative said it was strange to treat the Seafile service differently from other online storage services, implying that they don’t have to monitor their traffic.

Later, someone from PayPal’s risk management team is said to have contacted the company and reported it to stick to the original decision. If the conditions were not met, the service would no longer be allowed to receive payments via PayPal as of June 19.

Seafile only started offering a paid service for individuals and small businesses in October 2015 with the guarantee that files are on German servers. Seafile offers a service that is comparable to, for example, Dropbox.