Go Back   PayPal Limited & eBay Suspension Board > Merchant Account Help

LinkBack Thread Tools Display Modes
  #1 (permalink)  
Old 02-24-2010, 09:23 AM
Posts: n/a
Default PayPal and merchant accounts: The Truth

First of all, let me state that I'm not posting this to defend or bash PayPal or merchant accounts. I've been running a business for over 4 years and accept both PayPal and regular credit card procession on my site.

First, I want to make sure everyone understands that just grabbing a merchant account doesn't solve anything if you're trying to avoid PayPal. Merchant processors are far more strict regarding transactions than PayPal will ever be.

First, you need a business checking account, then it's a credit check and if you fall into high risk due to many factors; type of product/service to sell, credit history, length of time in business, etc....you're going to be denied, have a rolling reserve imposed or you'll have to cough up business bank records showing your average balance is capable of handling chargebacks.

Beware of any processors that give you a very fast approval. Most are typically scams that will lock up your account and hold your money for up to 10 months. Any decent processor will fully underwrite you and your business.

If you read the fine print in your merchant contract, they can absolutely take money out of your checking account. So let's say they deposit $2,000 into your bank and you spend it. 5 day later a $1,000 chargeback comes in - they will take that out of your bank and if there's not enough fund you'll be negative. That could cause your merchant vendor to lock your account and also your bank to close your account if you can't bring your negative balance positive quickly.

The previous paragraph is important since I've read a lot about how merchant account are "safer" because the money is placed right in your bank account. False. They can grab it out anytime they want due to a chargeback.

Even after getting a merchant account, the money is held typically for 3 days before it's deposited into your account. Depending on how long it takes for your bank to post the transaction it could be 5 to 7 business days after payment where the money is available.

Pretty much anyone can set up a PayPal account. They do not fully underwrite your business (although they reserve to right do if they smell a rat) and you can be up and running, taking payments quickly. You can get a PayPal debit/credit card and literally spend the money seconds after it hits your account.

Both PayPal and merchant processors have almost zero tolerance for "weird" or "odd" activity and both have almost a zero tolerance for chargebacks.

If you're a business owner please be aware that by default, credit card companies tend to side with the customer. If they state they didn't receive the merchandise/service or are unhappy with it chances are you're getting charged back.

If you're living "check to check" and that $300/$3,000 chargeback puts you negative both PayPal and merchant accounts will likely lock up your account if you can't bring it positive quickly.

The truth of the matter is this; PayPal is the method used by Ebay because a regular merchant processor wouldn't touch "Cindy" selling used furniture with a 10 foot pole. Merchant processors especially frown on line businesses using drop shipping methods when buying wholesale and selling retail.

So basically PayPal handles the accounts that regular processors won't touch, which comes with a lot of liability for PayPal.

I've heard a lot about how PayPal "makes money" by limiting accounts and holding the funds for six months. That would be false. They make much more by the fees charges with processing payments - so the decision to limit an account costs them money.

The other truth is PayPal grew too fast and years ago did indeed run rampant with account limitations - no way to contact them. That has all changed and although they still obviously limit accounts there's a way to contact them directly.

Another tip - don't accept credit card payments for large sums of money. You're asking for it. If I'm selling anything for thousands of dollars I'm only going to accept a check, and only ship/deliver the item when the check clears.

Reply With Quote
  #2 (permalink)  
Old 08-31-2010, 10:23 AM
Posts: n/a

bullshit I have been using paypal for 10 years

they do infact limit accounts to make interest think about it logically

they do not just freeze your account but several hundreds of thousands

and sometimes for no reason at all for 180 days so say they only hold 1000 users funds with a small say $100 in it which users with so little probably wouldn't be bothered to do anything about the hold after getting the run around not really worth small claims etc.

I am sue paypal can get a 10% return on this money over a 6 month period heck I can get 30% PA in australia.

so theres $10,000 Just in this example

paypal has 100 of millions of users so I think this would be a much larger scale

paypal cost one of my businesses $50,0000 and locked the money for 180 days I am sure I am not the only one.

they also just rcently locked my account for no reason whatsoever everything above board business account etc.

Reply With Quote
  #3 (permalink)  
Old 10-16-2011, 08:08 PM
Junior Member
Join Date: Oct 2011
Posts: 8
Default You're still good, but for how long?

You say you're good, but for how long are you good using Paypal? Who will have the last laugh when you finally do have a problem? Do you think we are all idiots because we have problems with Paypal?

Reply With Quote
  #4 (permalink)  
Old 11-30-2011, 10:42 AM
Join Date: Oct 2011
Posts: 65

it's only a matter of time...it is only a matter of time. 10 days, 10 months or 10 years you are going to be taken by paypal and when you do I hope you are not planning on calling their customer service because that is not going to get you anywhere. I hope you are not going to want to know why your account was limited because they are not going to tell you. You are just going to have to sit your pretty ass down and wait for paypal to give you your money when they feel like it.
Friends don't let friends use paypal!

Reply With Quote
  #5 (permalink)  
Old 12-01-2011, 01:11 PM
Join Date: Nov 2011
Posts: 75

I went with a merchant account thru this site with merchantinc.com and so far so good. My application did go through and underwriting process which did take a couple of days and once I got my information to set up my virtual terminal I was ready for business. I don't sell high ticket items but on the application I had the opportunity to set my high ticket and I don't plan on ever going over that. I have no worries because I am a business on the up and up with steady flow. I have the capability to moniter what is going in my acct and what goes out. If I have ?s I pick up the tele and call the customer service which pick up the tele, are friendly AND helpful, there is tech support 24/7....only used it once but again, walked me right thru my ? and I was good to go. I never had that experience with PayPal, guess I just wasn't one of the lucky ones. Oh well, at least PayPal didn't get the best of me either...I don't wish that on ANYONE

Reply With Quote
  #6 (permalink)  
Old 03-01-2012, 05:15 AM
Posts: n/a

I was goo too, till they decided to lock the account and ask for a receipt for the goods I'd sold, luckily I had a receipt but getting them to acknowledge it and put my account back in working order, that was a nightmare I do not wish that on anybody. Do you have a receipt for everything you buy, the last time on ebay when you received your you beaute item was the receipt in with the packing - or when it was not packed and on request did you get ignored by the seller - be prepared to have your account limited by paypal.

Reply With Quote


Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On

All times are GMT -5. The time now is 05:30 AM.

Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2018, vBulletin Solutions, Inc.

SEO by vBSEO 3.3.0