Greeks lose Apple iCloud space as capital controls stop payments

Some Apple Inc. customers in Greece started to experience a disruption to service on Tuesday as controls on the movement of money began to grip the indebted nation.

Since Monday, Greek credit cards cannot be used to make payments abroad — a fallout from limitations introduced by the government to stem a flight of cash as bailout talks faltered. Some account holders with subscription-based packages started to receive error messages on Tuesday while others had payments to the Appstore denied.

“On June 30, we tried to charge your account for your iCloud space of 20GB, but there is a problem with your payment details,” said one e-mail received by Bloomberg News staff based in Athens. “If we don’t manage to renew your subscription, your account will be downgraded to the free 5GB space program.” The user has a standing monthly payment for a 0.99-euro-cent payment for the storage service.

The disruption is one of the mounting inconveniences of life in Greece as it staggers into the economic unknown. Citizens woke up on Monday to discover the capital limitations, including a ban on most payments abroad, and cash withdrawals capped at 60 euros a day. That may affect Greeks’ abilities to buy Web-based services abroad, even while they are still at home.

Apple Music

The message comes on the same day that Apple rolls out its subscription-based service Apple Music. The service won attention earlier this month when pop singer Taylor Swift persuaded Apple to pay royalties for songs played on the service during a three-month free trial.

The Greek issue is essentially beyond Apple’s control. While Apple declined to comment, payments from Greek accounts to foreign bank accounts have been prohibited. Companies theoretically can continue to accept payments from Greeks. However, under the capital controls in effect, Greek lenders have been ordered to block payments to accounts outside the country.

Similar issues are expected with other popular Web-service providers with foreign accounts. Greeks traveling or working abroad are also not allowed to use their credit or debit cards for hotels, meals, tickets or any other expenses, as no payments to accounts made outside of Greece are authorized. Given the limitations on withdrawals, this effectively means that Greeks without bank accounts abroad can’t travel outside the country.

[Bloomberg]