PayPal Gone Wild

Yesterday we were informed by PayPal that they will no longer approve credit card transactions over $2,000 unless we set up a traditional merchant account with them. Their merchant terms were WAY outside the norm and actually more than than a regular PayPal business account.

They gave us no warning at all. They just stopped approving transactions over $2,000 and only informed us of their policy change after we called them to find out what was going on.

We have had a PayPal business account since 2001 and have never had a charge back.

When I was talking with their customer service folks it was almost as if they were trying to extort me to force me to change to their traditional merchant account by abruptly cutting off our payment transactions without any kind of warning. They actually said that if I agreed to the new and outrageous terms they would start approving the transactions again.

Needless to say I declined their offer and am looking elsewhere for credit card processing.

Gary A. Giddings
Owner
GalvanizedPail.com

Wow! Make me glad I have an Authorize.net merchant account!

Tina

US Purchase:

Yesterday we were informed by PayPal that they will no longer approve credit card transactions over $2,000 unless we set up a traditional merchant account with them.
I think you're mistaken. It's not something "new".

A regular PayPal Business Account has a per-transaction limit of $10,000 USD for transactions between verified parties. This limit used to be $2,000, but was increased to $10,000 at least 3 years ago. There are some edge-case exceptions, but 10K is the usual limit between verified parties.

However, there has always been a sending limit of $2,000 on any unverified account, so the buyer would need to go through the verification process before being able to send the payment. Once verified, the buyer no longer has the 2K limit.

It's not unlike someone using their credit card to make a large purchase someplace, especially out of town vacationing or online, and the card company temporarily denying the purchase until they can verify whether the transaction was intentional and not a result of a stolen card. PayPal wants to know the party and confirm their identity as a bona-fide cardholder before authorizing the higher transaction amount.

This has nothing to do with the status of your own seller relationship with PayPal. It's their standard operating procedure, and is not "new".

I suspect the representative you spoke with was trying to explain additional options to you, such as their traditional credit card gateway options.

From PayPal's website: > The maximum total amount of money you can send with PayPal is your Sending Limit. When you open a PayPal account, your initial Sending Limit is $0.00, even if there is a balance on the account. Once your email address is confirmed and a credit card is added, (and linked and confirmed if necessary,) your initial Sending Limit increases.

To view your initial Sending Limit, log in to your PayPal account and click the "View Limits" link.

To lift your Sending Limit and become Verified, log in to your PayPal account and click the 'Unverified" link on your Account Overview page.

All limits are denominated in the currency of your Primary Balance. If you send funds from a currency balance other than your Primary Currency, your Sending Limit will be reduced by the Primary Currency equivalent of the payment amount.So, once your buyer goes through that process, they will be able to send you the larger amount, subject to the limits imposed upon them by their own relationship with PayPal.

All of this was news to me. And they really did a hard sell on their traditioanl merchant account and they did tell me the limit would be removed if I signed up for their traditonal merchant account.

I did call them for clarification and it is actually worst. They are imposing a lifetime limit of $2,000 on each of our customers. No customer can ever purchase more then $2,000 from us in their lifetime without setting up a PayPal account with a verifiable bank account.

If this has always been their policy I certainly didn't know it until now. Really, why would anyone ever want to use PayPal with these crazy limitations.

I am dropping them like a hot potato ASAP.