I'm not saying that PayPal's account-limiting decisions are always irrational or entirely arbitrary. I am saying that in many cases, where there is no obvious cause, these decisions are based upon criteria largely out of control of the merchant. In the vast majority of these cases, PayPal chooses to close the account and hold the money despite the availability of effective risk-control alternatives that would enable the merchant to continue operating without interruption.
PayPal uses a number of factors to determine the risk associated with particular transactions, and in turn the aggregate risk presented by the receiving account. They look at things like the age of the accounts sending money to the merchant, percentage of foreign transactions, the payment methods used (credit card, instant transfer, paypal balance, etc.), and many other factors. None of these are within control of the merchant. If, in aggregate, these factors happen to fall outside of the the norms, it increases the likelihood that your account will be limited without explanation - regardless of how many faxes you send them and additional hoops you jump through.
While PayPal may in fact have internal data to justify these decisions, they could just as easily achieve the same risk-management goals with far more merchant friendly measures, such as rolling reserves. In far too many cases, they simply close the account and hold the merchant funds for as long as the law allows.
PayPal uses a number of factors to determine the risk associated with particular transactions, and in turn the aggregate risk presented by the receiving account. They look at things like the age of the accounts sending money to the merchant, percentage of foreign transactions, the payment methods used (credit card, instant transfer, paypal balance, etc.), and many other factors. None of these are within control of the merchant. If, in aggregate, these factors happen to fall outside of the the norms, it increases the likelihood that your account will be limited without explanation - regardless of how many faxes you send them and additional hoops you jump through.
While PayPal may in fact have internal data to justify these decisions, they could just as easily achieve the same risk-management goals with far more merchant friendly measures, such as rolling reserves. In far too many cases, they simply close the account and hold the merchant funds for as long as the law allows.
That is my problem with PayPal.