Last summer Polish developer and Wikidot CEO Michal Frackowiak launched Streamza, a torrent download service that lets users stream music and movies securely to their PC, TV, iPhone or iPad. Streamza has been growing steadily ever since and welcomes thousands of new users each month.

Earlier this week, however, the developer was presented with some bad news. Without prior warning, PayPal stopped providing payment services to Streamza and limited the associated account. That also means that all funds have been frozen for the time being.

“They emailed to inform me that my PayPal account had been reviewed and that Streamza does not comply with their policies. My account became ‘limited’ until I removed PayPal from checkout and agreed to their policies, which I did immediately,” Michal informs TF.

The PayPal ban is a major setback for Streamza, as it will no longer be able to process new and recurring membership fees from premium subscribers. At the time of writing the PayPal account is still locked, and Michal hasn’t heard from PayPal after the initial email.

As usual, PayPal remains vague about the precise reason for the ban. The payment provider mentioned that Streamza violated their Acceptable Use Policy, which suggests that PayPal is concerned about possible infringing uses of Streamza.

PayPal’s policies don’t allow “infringing” services to accept payments. In addition, the company requires file-sharing services to be pre-approved.

“Service Requiring Pre-Approval: Offering online dating services; providing file sharing services or access to newsgroups; or selling alcoholic beverages,” PayPal’s AUP reads.

This approvals process requires services to agree to a list of strict terms and conditions. As can be seen below, this includes full disclosure of the processes that are in place to deter piracy, and allowing PayPal to actively monitor their service for copyright infringements.

PayPal’s Terms

While Streamza doesn’t promote copyright infringement in any way, it could be used to download or stream pirated files, much like any other streaming or download services including YouTube. Michal believes, however, that the payment provider is more strict with smaller players.

“When looking at these policies I wonder how the hell Mega.co.nz can work with PayPal. Somehow I am not that surprised: rules between two bigger players can be different from between a bigger player and a smaller one,” Michal tells TF.

Technically, PayPal may have the right to cut off Streamza under its policies, but it would have been appropriate to send an early warning. Over the past few days the service could only accept payments via Bitcoin, which is hurting business.

Due to personal circumstances Michal had plans to auction off Streamza, and the PayPal issue is the straw that broke the camel’s back. He is accepting bids on Flippa and hopes someone is willing to take over the service, to keep the 34,000 registered users happy.

“I believe that after half a year of running Streamza I created something cool. A project that some people love. It’s not only a great tech and user interface, but a service that fills a niche,” Michal says.

“Personally I hope someone smart can take it from here. It’s a really good piece of tech and a project that has its fans.”

Update: A few hours after publication Michal heard back from PayPal. He can enter the pre-approval process to accept payments for file sharing. This means that Streamza has to comply with the terms listed above. Until this process is completed Streamza can’t process PayPal payments, but the other account restrictions have been lifted.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

The service was recently launched by Polish developer and Wikidot CEO Michal Frackowiak. Michal came up with the idea a while ago when he was looking for a convenient way to watch torrents on his iOS devices and TV without all the hassle of converting files and connecting cables.

“Watching movies on a laptop on a couch sucks, so I made a small script that uses EC2 and S3 to download and encode torrents so that I could stream these to my devices,” Michal tells TorrentFreak.

“I showed this to my friends and they wanted the same thing. So there was a thought: why not to build a web app that does exactly this?”

Fast forward a few months and Streamza was born. While the idea started as a simple home-brew solution to a common problem, the end result is a professional service that easily matches up with the competition.

Streamza works pretty straightforward. It downloads torrents instantly and supports streaming playback on laptops, desktops and iOS devices. In addition it also allows users to stream content directly to their TV via Apple TV. A lot of work has gone into the user interface which looks stunning on all devices.

Rather than a lengthy summary of Streamza’s features which includes subtitle support, or underlying technology such as the multi-bitrate HLS streaming, it’s probably best if people just give it a try.

And that’s where another advantage comes in – Streamza gives free accounts with one download slot and a maximum file size of a gigabyte. No credit card needed, no strings attached.

Another feature that will be appreciated by many users is the built-in torrent search. This is particularly handy on mobile devices where it can be quite cumbersome to add torrent files manually.

In the near future Streamza plans to add support for more devices and platforms. This includes support for Android devices, Roku, Chromecast, XBMC and opening up an API to allow third-party apps.

While the service will be expanded, the main focus of Streamza will remain “simplicity” and “accessibility” according to the developer.

“I definitely want to make the Streamza experience the best ever, so even my mom could use it. It’s the primary goal. It should work and make you say ‘wow’,” Michal says.

Those interested can sign up for a free account at the Streamza site. Users temporarily get 3 download slots and can earn additional ones by inviting friends, or by buying a paid account which also allows for torrents up to 30 gigabyte.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.