What Was Payza?
Payza was an internet-based payment processing service that allowed individuals and businesses to send and receive funds using bank transfers as well as with cryptocurrencies like bitcoin.
Due to financial improprieties and complaints lodged against the company, the U.S. Department of Justice opened a criminal investigation into Payza as early as 2015. In 2018, Payza's founders and operators were indicted by a federal grand jury on charges that they “operated an Internet-based unlicensed money service business that processed more than $250 million in transactions.” Payza's website is inactive, and the company appears to no longer operate, but it is still registered as an active corporation in the UK.
- Payza was an online and mobile payments service that allowed users to transact in both fiat money as well as cryptocurrency.
- Less popular than similar platforms such as Paypal, Payza saw most of its activity in Bitcoin payments and cross-border remittances.
- The company faced several legal and technical hurdles, and was ultimately shut down by regulators after an investigation revealed fraud and unlicensed financial activity.
Payza was a founded by two Montreal-based brothers in 2012 as the DBA of MH Pillars Ltd. of London, United Kingdom. While not as widely-used as other online payment services such as PayPal, it became a relatively popular method of sending remittance payments, especially using cryptocurrency. Similar to other digital payment companies, Payza provided a mobile application that gave individuals access to the service from their smartphones.
Payza enabled individuals to deposit funds into their accounts, with the balance held in an e-wallet, which could be made several different ways depending on the account holder’s location, such as wire transfers, bank transfers, credit and prepaid cards, and bitcoin. Funds could be withdrawn through bank transfers, wire transfers, prepaid cards, and bitcoin as well.
Payza also supported payments to businesses, with a particular focus on e-commerce. It offered a snippet of code that could be added to a website to create a “Buy Now” button and integrate with online shopping carts supported by third parties. Customers who already had a Payza account could pay for goods and services using their e-wallet., or else use a credit card or prepaid card, as well as other payment options available in their geographic areas.
The Payza App & Business Model
Opening a personal or business account with Payza was free. Funding an account was also free for bank transfers over a certain threshold - $200 in the United States – but fees were charged for funding via credit card or bank wires. Account holders could also fund using bitcoin.
Payments sent through the system did not incur a fee. Fees were instead charged to the party receiving funds, with the fees varying based on what payment method was used. Most fees included a percentage of the transaction value plus a per-transaction fee. Credit card payments tended to carry the highest percentage fee. Withdrawing funds from a Payza account was free if the eGift card option was chosen. Bank transfers incurred a flat rate, while using bitcoin incurred a mining fee.
Legal & Technical Issues
As a service provider, Payza was not regarded as highly as more well-known companies. Customers have experienced significant service disruptions, which often involve funds being unexpectedly frozen without a thorough explanation.
In 2013, U.S. account holders were suddenly prevented from accessing funds, with the company blaming problems with a third-party provider. Some complaints accused the company of locking access to account funds so that it can collect interest. For business owners, this can make Payza an unreliable option when it comes to choosing a merchant account, since businesses need consistent and uninterrupted access to their funds.
The company was subject of a 2015-2016 U.S. federal investigation, and by 2018 Payza's founders had been indicted by a federal grand jury on charges that they “operated an Internet-based unlicensed money service business that processed more than $250 million in transactions.” Payza’s U.S. operations have ceased, and merchants are reporting that its European site is also not paying out money transfers. Payza's founders pled guilty to several charges on July 17, 2020, and the Department of Justice has posted information about the possible return of forfeited funds to eligible persons.