Paypal and some issues

3 replies
I've read some posts on this forum that it is 'risky' to use Paypal as a payment processor if you are receiving large payouts, just wondering how large must the payouts be before I switch to another payment processor? Also, if that is the case why do I see so many WSOs accept Paypal? Just curious, Ive never had any issues with Paypal so far
#issues #paypal
  • Profile picture of the author bgmacaw
    Large payments, meaning dollar amount, can result in extra scrutiny from PayPal if they aren't tied to a well defined transaction.

    For example, let's say I own a HDTV ecommerce site, sell TV's for $1000 or so and take PayPal. As long as there's a clear physical product being sold I probably won't have any problems. Digital products get a little more iffy but the same is usually true for them as well.

    But, let's say that 10 different people use 'send money' to send me $1000 each that's not tied to any known PayPal transactions. The red flags go up and my account would be limited.

    They do this to prevent PayPal from being used in things like gambling, MLM and matrix schemes, money laundering, drug transactions and other things that are illegal or simply against their terms of service. Some of this is required by US law under various anti-drug and anti-terrorism laws and some of it is PayPal protecting their business.
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  • Profile picture of the author SteveJohnson
    Good description, BG.

    I have a web client that runs $50K/mo+ thru PayPal with no issues whatever. They are all $35 sales from a farm co-op subscription. They've never had a bit of trouble, and PayPal loves them, has them on their 'preferred vendor' list and practically drools over them.

    If you're on the up-and-up and use PayPal within their TOS, you'll be fine.
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  • Profile picture of the author falcon_warrior
    Ok let me get this straight: If I were to have a Paypal button on a website selling a product, and if many people buy it, I won't fall under the scrutiny of Paypal. Rather it is the "send money" option that raises eyebrows am I right?
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