Be very cautious if opening a PayPal account to accept incoming
payments…even after 5 years of selling on eBay with no problems
(and accepting PayPal for over 80% of the payments), I do not
recommend using it…especially as your only way to accept credit
card payments. Here’s why:
PayPal is NOT technically a bank or a credit card company, they are
only a “processor” of funds, and as such, are not governed by
standard banking/credit card rules, laws or organizations (they are
not insured by the FDIC, etc).
What you read on the site ‘paypalsucks dot com’ are verifiable true
stories, and could easily happen to anyone.
Once you open an account, to have it “verified”, you MUST attach it
to one of your bank accounts…and whether or not you immediately
withdraw all funds from Paypal, in the event of a complaint or
dispute by a customer, PayPal WILL TAKE THE FUNDS FROM YOUR BANK
ACCOUNT and freeze them until they have resolved the dispute. And
their word/decision is final…you have absolutely NO RECOURSE
legally once they make a decision.
For example, let’s say you sell an item for $1500.00, accept payment
via PayPal and the buyer asks you to send to their mother for a
Mother’s Day gift…and then in a few days they file a complaint
saying the item was never received. Even if you have proof of
delivery, you have sent the item to an “PayPal unconfirmed address”,
and just by doing that, PayPal will (almost always) take the $1500.00
from your PayPal account OR bank account, and hold it (for up to 6
months, I believe) while they are ‘researching’…and items sent to
"unconfirmed PayPal address disputes" are vitually always settled in
favor of the buyer. That may not be truly legal, but it is in “PayPal
land”…and when you’re in PayPal land, it’s their rules that rule.
I am going to change our set up, and open a different bank account
solely for PayPal usage and transactions. Then I can withdraw monies
from PayPal either from an ATM or by getting a cash advance with my
PayPal debit card, and immediately transfer them to my normal
account at a different institution. (there’s a $400 per day limit on
cash withdrawals either way). I’m pretty sure that 'system’
would/will prevent them from taking back whatever monies may be
Be cautious and very careful…it’s a jungle out there.