Yesterday we reported that capital controls were stopping people in Greece from buying songs on iTunes.
Greece put capital controls — which limit withdrawals from bank accounts and a €60 per day cash limit from ATMs — in place on June 29. Since then, people and businesses have started to lose access to the sort of internet services the rest of us take for granted — as iTunes, PayPal, cloud storage, and app stores — because they are unable to send money out of the country.
While accessing iTunes is probably the least of Greece’s problems, this does show how centralised the internet actually is, with many services hosted in just one country, often not your country.
The problem with iTunes isn’t that people don’t have enough money in their account to pay for a track. They are unable to buy even a single song for €0.99 using a Greek credit or debit card because Apple is an American company, and making a payment to them would mean money leaving Greece to the US.
People in Greece are also finding that their cloud storage subscriptions are being disabled because the regular monthly payments to Apple for iCloud, or Google for Dropbox, for example, are being cut off. While iCloud gives you 5GB for free, that’s often not enough to back up multiple devices, photos and apps.
People also aren’t able to use PayPal to send money or make payments to anyone outside the country. Mic reports that people are also unable to send money via PayPal to someone else in Greece, because by sending money through PayPal, funds move across servers outside the country. Some of our sources in Greece have said that they think Paypal has stopped anyone in the country sending funds at all.
Money transfer companies such as Western Union and Money Gram have stopped operating in Greece for now, CNBC reports. While Transferwise can’t send funds out of the country, it is still letting letting people receive money from other countries. A spokesperson for the company told CNBC that “the controls mean that all and any payments from Greece are on hold and subject to further notice,” and that Transferwise is monitoring the situation closely. We have reached out to them for more details.
These restrictions have caused some big problems for Greek startups, who have been unable to pay for cloud storage, ads, domain hosting or credit card processing services from providers outside Greece since the capital controls came into place. Some have managed to convince their providers to keep their accounts open for the time being, FastCompany reports, while others have been helped by friends and family overseas.
For the rest, the internet did come in handy. The founders of Greek startup Bugsense, John Vlachoyiannis and Panos Papadopoulos, have started a site allowing Greek startups to apply for help to cover their costs from foreign supporters, with Marc Andreessen even pledging his support.
Fast Company points out that the last country to impose capital controls was Iceland in 2008. Back then, companies were less reliant on cloud storage, and the country had built up plenty of data centres of its own. But Greek startups are going to have to find a way around these restrictions if capital controls stay in place.