(BBC) – Last month, Education Secretary Damian Hinds called on PayPal to stop processing payments for such firms, in a bid to beat academic cheating.
Mr Hinds had said it was "unethical for these companies to profit from this dishonest business".
PayPal is to begin contacting firms which use its payment system to sell academic essays online.
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"PayPal is working with businesses associated with essay-writing services to ensure our platform is not used to facilitate deceptive and fraudulent practices in education," said a spokesman for the payment firm.
"PayPal will continue to diligently review and take appropriate action on accounts found to facilitate cheating that undermines academic integrity."