Are Paypal Business accounts? less prone to get limited/questioned? over large fund trasnfers?

22 replies
from your experience, for those of you who have paypal business accounts, does this reduce the chances of your accounts being limited?

(on just the basis of taking regular large amounts of funds INTO your account)

ie, $6000+ 1-2 times a week,


(I dont mean if you do anything unethical, or put your affiliate link on your sales page, or 'withdraw' all your funds at once)

but I am mainly asking about ONLY taking in regular large amounts of funds.

Is there less chance of closing wtih a business account, compared to a premier paypal account?

(lets say the correct documents have been given to paypal, to turn it to a business account)
#account #business #limited or questioned #paypal #people #prone
  • Profile picture of the author WillR
    David,

    There are no guarantees with Paypal at all... and anyone who tells you otherwise is just feeding you lies.

    It's not so much the amount of money that matters... although that does play a role. It is that amount of money compared to what your account normally does. If your account has had very little to none activity over the past however long, if all of a sudden you start taking in large amounts of money, that is sure to trigger their fraud checks. This then means someone will likely do a manual review of your account and look more closely into where this money is coming from and what you are providing in return.

    The short answer is no. Having a business account does not stop anything. You will find a lot of the guys who had their accounts frozen were also using business accounts. In a lot of cases though it was a sudden spike in funds that first attracted attention to their account at which point a manual review is done. Based on what they find they will either choose to let you keep on selling or they will deem your business practices too high risk for them and freeze your account.

    You won't know until it's too late. All you can do is have backup plans in place and make sure your are following their TOS. They will usually ask you a bunch of questions so make sure you have honest and logical answers for all of those. If you find yourself having to stretch the truth a little to make things sound better then it's likely you already know you shouldn't be selling through Paypal.
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    • Profile picture of the author Crew Chief
      OP, the statement made by WillR is a factual and incontrovertible truth...

      Originally Posted by WillR View Post

      David,

      There are no guarantees with Paypal at all... and anyone who tells you otherwise is just feeding you lies...
      You may read and hear about all kinds of people that have never had any issues with PayPal; I'm one of them and my volume is up there.

      But I would be misleading you if I told you my experience was the norm. I've got plenty of friends and business partners who have been arbitrarily slammed by PayPal and they did everything according to PayPal's TOS.

      If you read their TOS, you will clearly realize that it is what legal minds classify as a "Contract By Adhesion." In layman's terms, it means that you agree to enter into a contract with PayPal so long as you agree that PayPal is affording you absolutely no rights.

      In their contract, PayPal does not need to prove anything shady is going on with your account before they limit you or decide to close your account. Taking such action against you is within their sole discretion.

      How do they pick which accounts they are going to limit or shut down. That is up for debate but WillR did give some good barometers.
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      • Profile picture of the author JST3P
        This is a question that is deceptively simple but has many complex answers.

        Basically, a business acct with a Tax ID/EIN/SS # atatched is less likely to be seen as risk in and of itself because the user has given more personally identifying information; they are less of a risk.

        An account getting limited can happen for so many reasons though, that having a verified premier business acct is no guarantee in and of itself that you won't run into problems.

        Things that trip the alarms are changes in activity, spikes in volume ("explosive growth"), quick exit of funds, transferring of funds between accounts that are linked by 1 or more pieces of information, any attempt to conceal referring URLs for payment, etc eyc.
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  • Profile picture of the author WinstonTian
    I've recently switched certain streams of
    income to accept only credit cards/bank
    transfers instead.

    Relying on a third-party processor gets the
    hairs at the back of my neck standing...

    I mean, what happens if that 3rd party goes
    down overnight?

    Your whole source of income collapses like
    a sandcastle.

    Winston Tian
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    Cheers,
    Winston
    The Beginner's Doctor

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  • Profile picture of the author Ben Gordon
    My friend's doing $20K/mo with a premier account and has no problems.

    Although a business account reduces risk, it does not eliminate all risk associated to your account, and they could well limit your account if they find anything suspicious.

    If you talk to a PayPal associate about your business and your business model then I'm sure they'll give you feedback about what could happen and how to prevent it. Also they could perhaps lower their risk protection for your account.

    A $6000 payment can definitely raise flags to PayPal, especially on a premier account without prior discussions with PayPal. That's why whenever you're doing a launch, or prior to receiving a large payment, I would suggest you contact PayPal and let them know about it.
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    • Profile picture of the author WillR
      Originally Posted by Ben Gordon View Post

      My friend's doing $20K/mo with a premier account and has no problems.
      Once again, it is not the amount of money that's the issue. There are people who do hundreds of thousands of dollars per day through Paypal. What first rasies the alarm is an irregular spike in activity. So even if you were doing hundreds of thousands per day, if all of a sudden you start doing millions per day they are going to have a closer look at that and make sure there is a logical explanation for that spike.

      Originally Posted by Ben Gordon View Post

      A $6000 payment can definitely raise flags to PayPal, especially on a premier account without prior discussions with PayPal. That's why whenever you're doing a launch, or prior to receiving a large payment, I would suggest you contact PayPal and let them know about it.
      Talking to them beforehand prevents absolutely nothing. If they see unusual activity they will take action regardless of whether you contacted them beforehand or not. By contacting them beforehand the only thing you are likely to achieve is a manual look at your account that may otherwise have never happened.

      Originally Posted by birddog200 View Post

      Someone ordered one of my highest priced products at about $4,200 and I got my business account flagged for about a week. That is not a large amount compared to what some of the people here rake in on one day. I am about to start looking at plimus and a few others that aren't so finicky.
      Good luck. Chances are any payment processors that do not take steps to limit their risk will not be around for very long. If you think what Paypal do is out of the ordinary or unfair then you don't understand what's involved in operating a proper business. Sorry, but anyone who runs a serious business and understands risk management wouldn't be questioning what Paypal does. It's pretty standard stuff. You see weird activity going on, you take a closer look. If something seems suspicious or too high risk you then ban it from your network. Nothing super hard to understand about that... is there? Paypal wouldn't still be around today if they didn't treat risk management as seriously as they do.
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  • Profile picture of the author jivens
    Banned
    What merchant accounts do you guys recommend? Me no likey paypal lol.
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  • Profile picture of the author romanos8
    Banned
    The answer is no, but anyway is good to have a business account
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  • Profile picture of the author sanjx01
    I don't think so David.

    But why not sign up for a business account anyway?

    It is free

    Hope that helps!

    ~S
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  • Profile picture of the author nnaij
    I think premier account is good enough unless your really doing a big business.
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  • Profile picture of the author Brian Tayler
    what is the issue with having a paypal business account? its really no harder to setup? so if it does or doesn't provide a layer of protection it shouldn't matter. personally I feel much more at ease sending my money to a business than an individual. for that reason alone I'd always upgrade to paypal business. it was painless from what I remember.


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    • Profile picture of the author WillR
      Originally Posted by Brian Tayler View Post

      what is the issue with having a paypal business account? its really no harder to setup? so if it does or doesn't provide a layer of protection it shouldn't matter. personally I feel much more at ease sending my money to a business than an individual. for that reason alone I'd always upgrade to paypal business. it was painless from what I remember.
      Exactly. Paypal offer business accounts for a reason. It's because they want people using Paypal for business to use those accounts. Therefor if you are running any sort of decent business on Paypal you should be using a business account.
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  • Profile picture of the author Steven Miranda
    Stripe.com is a really great merchant account without all the hassles like others.
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  • Profile picture of the author Emil from Bavaria
    I think they don't care that much when they (or more precisely: their software) feels the need to put your account on hold. Mine is business, verified and old but they will still put it on hold whenever I log in from another country.
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  • Profile picture of the author Jon Patrick
    The best thing you can do when it comes to Paypal account concerns is make sure you are completely above board in your activities, and are able to prove it. When I was an eBay seller, I once had a surge of sales volume due to listing a new product line, and my account was limited. They will ask you for a LOT of information and documentation, but if you successfully provide it all, any limitations on your account shouldn't last long. It also helps in that situation if you call them and politely communicate with them throughout the process.
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  • Profile picture of the author Silas Hart
    The most direct answer to your question is "No." Choosing between a personal, business, and premier is really a user end selection of their own diversification.
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    • Profile picture of the author WillR
      Originally Posted by FaJeeb View Post

      The most direct answer to your question is "No." Choosing between a personal, business, and premier is really a user end selection of their own diversification.
      Incorrect. If you are conducting business then you should at the very least have a premiere or a business account... NOT a personal account.
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      • Profile picture of the author Tina Golden
        Originally Posted by Emil from Bavaria View Post

        I think they don't care that much when they (or more precisely: their software) feels the need to put your account on hold. Mine is business, verified and old but they will still put it on hold whenever I log in from another country.
        Of course they do and they should. They do this for YOUR protection, not their's. If you are going out of your geographical area, you should always call them so they can note it on the account. Otherwise, it's flagged as a possibly stolen card or hacked account. If you travel out of the country frequently, tell them that.

        Originally Posted by FaJeeb View Post

        The most direct answer to your question is "No." Choosing between a personal, business, and premier is really a user end selection of their own diversification.
        No, it's not. It's against the TOS to do any business through a personal account. If you sell anything or provide services, more than a random eBay sale, then you are doing business and MUST use a premiere or business account. I don't for the life of me understand why so many stick to a personal account and risk never being allowed to use PayPal again simply to save a few dollars in fees.
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      • Profile picture of the author Silas Hart
        Originally Posted by WillR View Post

        Incorrect. If you are conducting business then you should at the very least have a premiere or a business account... NOT a personal account.
        The question was Are PayPal Business Accounts Less Prone to Limitation OVER LARGE FUND TRANSFERS. Not "Are PayPal business accounts less prone to limitation for consistent transfers."

        The answer is No. It doesn't matter if you are a premier account, business, or just a personal account. If you were to collect a surge of sales or withdrawal a large amount that is not consecutive to your past withdrawal amounts, it is going to raise some red flags regardless of what level your account is.

        For example, if you get $10,000 in sales over the course of 3 days from a product launch, PayPal will determine the status of your account from being verified or not verified. If you are not verified, it will raise more red flags and your account will be limited and/or frozen systematically before human inspection. To be unverified means you do not have a TIN associated with your account and are not personally linked to your PayPal account. PayPal considers these accounts a higher risk which is why there are limitations on these accounts.

        If you think because you are a "Business" or "Premier" account that you are less likely to face systematic limitations by PayPals' fraud detection and risk assessment systems, then you are poorly mistaken. It doesn't matter. If you go from doing an average of $400 of PayPal to Bank withdrawal transfers to $4,000, you will raise red flags.

        If you own a personal PayPal account and start conducting business on eBay, you will be switched to having a PayPal Business or Premier account. The key is to have somewhat consistent sales, working with PayPal to resolve issues, keep your refund and dispute rate as close to Zero as possible, and increase your communications with PayPal, and even be willing to keep a reserve amount in your PayPal account.
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  • Profile picture of the author WillR
    For those playing at home, here is a simple breakdown of the different account types:

    https://www.paypal.com/cgi-bin/websc...tTypes-outside
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