What do PayPal Merchant Accounts allow people to do?
PayPal is an online commerce facilitator that allows the transfer of currency from one person to another through the internet.
In an attempt to stop fraud, PayPal allows those engaged in internet commerce to avoid fraud that is inherent in other online transfers of money. Part of the safety guaranteed by PayPal manifests itself as PayPal does not credit one person for a transfer until the other person has made efforts to ensure that he or she will carry through with their part of the deal. This devotion to protecting people from online scams has allowed PayPal to expand to countries all around the globe, and to develop into one of the formidable forces in current internet commerce.
Why is the company shutting down high risk PayPal Merchant Accounts?
The company’s devotion to preventing fraud has caused it to take actions to shut down or otherwise limit the usage of Paypal merchant accounts by people it deems to be high risk. With little prior warning to individuals using the site, PayPal has prevented some users from being able to access their PayPal merchant accounts and the money therein contained because of their purportedly suspicious or financially impractical activities.
PayPal’s hope, in this interference with the accounts of its users, is to further cut down on fraud and to avoid interacting with insolvent people, and those gaining money in mysterious or unknowable ways. By targeting individuals engaging in suspicious activities on PayPal, either through massive transfers of money with no explanation, or other activities, PayPal hopes to both make the best financial decisions possible, and to maintain its thus far well preserved reputation as an internet commerce company free from many of the scams so prevalent on the internet.
What has the response been to the shutting down of PayPal Merchant Accounts for high risk users?
Many PayPal users are now complaining that the company has shut down their PayPal merchant accounts and taken possession of the contents of their accounts with little reason or warning. Users complain that legitimate business might be misconstrued by PayPal to be nefarious merely because a user fails to identify correctly what he or she is transferring, or the reasons why the transfer is being made.
Seizure of accounts by PayPal can lead to people being delayed access to the money in their accounts for up to several months as PayPal sorts out whether or not supposed ‘high risk’ clients are in fact dangerous for PayPal to continue doing business with. PayPal users should be encouraged to maintain good credit, have clearly established deposits and transfers, and work to not overdraft on other accounts to avoid the scrutiny and perhaps restrictions PayPal has come to recently enact.
It’s noteworthy that many (not all) of the Internet marketers complaining about closure of their PayPal merchant accounts have run shady online operations that expressly or implicitly violated the terms and conditions of having a merchant account in the first place.