When PayPal decides to limit your account or freeze your funds, resolving the issue can take a very long time. For sellers of digital goods, who have built their business on PayPal, and depend on the service for their revenue, this can have disastrous consequences.

For many businesses selling digital goods, PayPal is the go-to payment solution. It’s easy to set up and consumers love it. However, there’s also a dark side to using the popular payment service; if you get disconnected, it’s very difficult to get your account back in good standing.

With funds frozen and while waiting for the issue to be resolved, many companies go out of business. So why do businesses still use PayPal? It’s what customers want. Finding a viable alternative to PayPal, that is also loved by customers and available in all geographies, is a tall order.

Understanding PayPal

When running a business that relies on digital transactions, it's crucial to understand how platforms like PayPal operate. PayPal, a leading payment platform, has been revolutionizing commerce globally by offering seamless ways to transfer money and make online purchases. However, there are times when PayPal users face challenges, particularly regarding limitations placed on merchant accounts.

To give some background, many merchants accept PayPal payments as a payment method for their customers' convenience. It’s important to have a PayPal account linked to a current account or bank account to facilitate these transactions. Whether customers use their debit card, PayPal credit, or a digital wallet, the variety of options available to merchants makes it a versatile choice.

Yet, some merchants encounter limitations placed on their accounts. These restrictions often arise due to suspicious activity, regulatory compliance, or issues requiring credit approval. In such cases, seeking support from the PayPal help centre can be the first step in resolving the issue. Additionally, exploring a PayPal offer may help alleviate some constraints while providing alternate solutions.

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Think your digital goods are protected by PayPal?

Why merchant accounts get limited by PayPal?

PayPal, as a payment service, is a favourite target for fraudsters looking to commit payment or identity fraud. As a result, PayPal is very sensitive when it comes to protecting its business and reputation. The mere suspicion of fraud can lead to heavy-handed responses like limiting your account and freezing your funds. This is especially true for webshops that sell digital goods such as gift vouchers, mobile credit, payment cards, game cards, SIM cards or prepaid credit cards. For these businesses, up to 10% of annual revenue is lost to fraud. This is a shame, because fraud protection is not that expensive to begin with.

How to prevent getting deactivated by PayPal?

In order to prevent PayPal from taking these drastic measures, businesses need to be proactive in stopping fraud attempts (including false positives) from happening in the first place. For most online businesses, this level of cybersecurity falls way outside their scope, and simply installing a plugin definitely won’t cut it. Online payment fraud is an advanced problem that requires professional expertise.

Has PayPal denied you a merchant account?

In some cases, PayPal won’t even take you on as a customer. Often times, businesses selling high-risk products, such as digital goods and online services, are regarded as a risk to PayPal itself. If you’re having trouble getting started with PayPal, our Profit Boosters can help you set up an account that is guaranteed to be approved.

How Alphacomm helps merchants resolve (and prevent) PayPal issues

Being cut off or turned away from PayPal is a big pain that we solve here at Alphacomm. Our personal relationships at PayPal enable us to intercede on behalf of our customers and get issues resolved quickly.

We also help sellers of digital goods prevent disconnections from happening in the first place by providing indemnified fraud checks on all PayPal transactions. This fully protects businesses using PayPal from identity fraud. By taking over all payment fraud risks and handling, we help online merchants boost their profits and allow them to focus their resources on what really matters; the growth of their business.