PayPal to give up $30M after DOJ accusations of bias in favor of minority-owned businesses

PayPal is expected to launch a new initiative waiving processing fees on $1 billion’s worth of transactions at the value of $30 million after signing a Tuesday settlement with the Justice Department to resolve concerns about its previous commitment to support minority-owned businesses. 

In 2020, the company created the Economic Opportunity Fund with intentions to use $530 million to uplift Black- and minority-owned small businesses following the controversial killing of George Floyd, who was strangled by a police officer in Minneapolis, Minn.

The Justice Department said the program was “discriminatory” while PayPal has denied accusations of wrongdoing. 

Under the Tuesday settlement, PayPal has agreed to create the Small Business Initiative to support companies that are veteran-owned or engaged in farming, manufacturing or technology, per the Justice Department. 

The company has also agreed to designate a director of the Small Business Initiative, assess the needs of American small businesses and determine how PayPal can best support them, submit plans and proposals for the initiative to the United States and report on the initiative annually.

“American corporations are on notice: you will face our aggressive enforcement if you use race or national origin to discriminate against qualified Americans,” Acting Attorney General Todd Blanche said in a statement.

PayPal is not expected to pay any money to the government and was not found liable for violating the Equal Credit Opportunity Act, which prevents creditors from discriminating against applicants based on race, color and national origin.

“For more than two decades, PayPal has helped small businesses start, scale, and thrive by expanding access to digital financial tools,” PayPal told The Hill in a statement.

“We’re excited to launch the Small Business Initiative to infuse American small businesses with even more economic opportunity,” the company added.

The settlement comes as the Trump administration increases efforts to weed out diversity, equity and inclusion efforts from both the private and public sector.