MasterCard, Other Payments Companies Cut Off WikiLeaks

MasterCard Inc. is in the process of suspending payments to WikiLeaks, a spokesman said.

PayPal Inc. made a similar move. The eBay subsidiary cut the website off from donations last week. A PayPal spokesman said the San Jose, Calif., unit of eBay Inc. notified the account holder, the Wau Holland foundation, on Friday.

Both companies said the occurrence of blocking a specific merchant is a one-off.

Visa Europe is also suspending WikiLeaks.

"Visa Europe has taken action to suspend Visa payment acceptance on WikiLeaks' website pending further investigation into the nature of its business and whether it contravenes Visa operating rules," the company said.

Each company is trying to distance itself from the website, which has released thousands of classified documents, analysts said.

The Justice Department is investigating the embattled organization and its founder, Julian Assange.

"We live in a very litigious society. They are concerned that they will be funding an illegal enterprise," said Thomas C. McCrohan, managing director for equity research at Janney Montgomery Scott in Philadelphia.

"We live in such a legal society that they would be negligent. … The lawyers have taken over," McCrohan said. "This guy has become a liability to our business and we are not making a lot of money on this."

Such actions by payments networks, while rare, are not unheard of.

"I remember the case when one of the networks … stopped allowing its cards to be accepted by allofmp3.com, a Russian-based website accused of breaking the music copyright laws," Zilvinas Bareisis, a senior analyst at Celent, said in an e-mail. He added that, while the companies are justified in their actions, it seems more like the job of a merchant acquirer than a payment network.

"The bank, the sponsoring institution, they are responsible for merchants," Bareisis said. "That's why it's so unusual for the network to step in. Maybe it's because it's an extreme case."

Assange was arrested after turning himself in to British police Tuesday, media reports said, for a Swedish arrest warrant for alleged sex crimes.

Analysts said this makes payments networks even less willing to do business with Assange and his organization.

Brian Riley, a research director for bank cards at TowerGroup, said in an phone interview: "There are particular reasons that [the payment networks] are doing this. It goes to the same issue on having unacceptable transactions through the payment network."

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