After Visa and MasterCard, online payment system PayPal now also decided to no longer facilitate payments to illegal file sharing sites. This measure follows from a newly made agreement between PayPal, IFPI and the London police. 

MasterCard and Visa made a similar agreement in March this year, ending payments to 24 so-called pirate sites. As expected, payments to file sharing sites through alternative payment systems like PayPal, then significantly increased. 

From the agreements with payment service providers follow that the IFPI can present evidence of illegal music downloads through infringing sites to the London Police. After the police have verified this evidence, the payment intermediaries will be informed. Visa, MasterCard or PayPal then ask the sites involved to provide the proper licenses. If these are not provided, the payments to these sites will be terminated. 

The fact that credit card and other online payment companies are cutting off payments to illegal file sharing sites will certainly have a significant effect. While the admins of file sharing sites often claim to act out of ideological views, in fact more financial considerations are usually concerned. Obviously, file-sharing sites are a good source of income. Free movies, music and videos attract many visitors, assuring high revenue on advertisements shown on these sites. Also, most sites ask their fans to support them through 'donations'. The revenue through

Now that payments flows through the most used systems Visa, MasterCard and PayPal are drying up, this will certainly have a negative impact on the revenue of filesharing sites. And probably also to the "idealistic" motives of the admins…   

Source: IFPI