Why Did I Get Shut Down by PayPal?

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Online selling is doing extremely well thanks to online vendors focusing on providing excellent merchandise and services. One of the preferred payment options that online sellers like to use as a payment gateway is PayPal. That’s because it’s recognized the world over as a reliable service for peer to peer payment. 

A majority of online business owners use PayPal to receive credit card payments on their websites. This seems like a symbiotic relationship that has a small chance of going wrong.

If PayPal closed your account, get started receiving payments again with EMC2 Billing.

So why would PayPal shut down an account?

Shutting down a PayPal account can drastically affect one’s online business. Most people that don’t understand why their account was shut down didn’t take the time to read some of the terms and conditions of receiving payments from PayPal.

Usually, apart from providing correct bank details and other personal details, opening a PayPal account is fairly easy and unrestrictive. What PayPal does, however, is monitor accounts closely. At any slightest anomaly that is not in line with the platform’s terms of use, the account will be shut down.

Amongst PayPal’s many terms of use, providing false, inaccurate or misleading information can lead to account closure. So can engaging in potentially fraudulent or suspicious activity and/or transactions.

Knowing what terms PayPal expects of its users can help one to avoid breaching their terms and getting shut down. For instance, PayPal does not support the selling of certain products such as tobacco products like cigars, cigarettes, e-cigs and vaping products. The truth is one may get away with a few sales, but it’s only a question of time before PayPal picks it up and gets in touch to inform that the vendor is in breach of their policy. This could easily lead to a shutdown of the account.

Some of PayPal’s security checks on a vendor or PayPal user also monitor the amount of money coming into an account and the frequency. PayPal accounts now have a limit on what amount of money an account can receive at one time. That means any time an account receives more than the prescribed payment limit, the PayPal security system prompts an alert that seeks to verify the user’s ID and current address. With internet fraud so rampant, PayPal’s account monitoring and policies are quite strict. If the required documentation is not provided, that means the vendor is in breach of PayPal’s policy and their account will be shut down.

The inconvenience of a closed account for a PayPal user can cripple a business, freezing funds up to six months. 

What makes the frozen account all the more frustrating is that it’s extremely difficult if not impossible to get a hold of a PayPal employee on phone or via email to address the situation. 

Additional common reasons that may lead to a PayPal account getting shut down abruptly or being limited include:

  • An upsurge in sales that are significantly above average
  • Introduction of new product to a business
  • Selling products that are deemed questionable
  • Presence of any content that may be deemed questionable on one’s website or on social media platforms
  • Violation of PayPal’s policy
  • Any real or suspected fraudulent activity on one’s account
  • Conducting business with other vendors who are blacklisted by PayPal

It’s highly advisable that PayPal users take some time to go through the terms and policies of this payment service to ensure they do not inadvertently contravene some regulation that’ll culminate in the freezing of an account

Upon going through the terms and conditions as stipulated by PayPal, some of the language might seem vague and cause a wide variation in interpretation. For example, one regulation says that PayPal will take action if one “takes any action that may cause us to lose any of the services from our internet service providers, payment processors or other suppliers.” Since it’s unclear who their vendors are, it might be difficult for companies to adhere to their regulations and they might eventually find themselves with a shutdown.

Find out how EMC2 Billing can help your high-risk business.

What is the next best option

If one wakes up to a shut PayPal account or it has become apparent that PayPal is not the right payment gateway for one’s business, then what? Fortunately, there are other payment services that can get the job done without the ever-lingering worry that a business account may be closed abruptly. One of those solutions is getting a merchant account with merchant services. 

Business owners appreciate one thing: to be forewarned is to be forearmed. When opening a traditional account with merchant services, they take the time to communicate their terms and policies accurately as part of their verification process before an account is issued.  This helps to avoid any nasty surprises ahead. The fact that one has access to a round the clock customer support that is ready to help out with any arising issue, is very comforting. At EMC2 Billing, we’re here to answer your questions and have foolproof payment processing. 


Although PayPal is a common payment processing service, many fear the inconvenience of having their accounts closed or frozen abruptly without much of an explanation or an effective avenue for recourse. If one has to go another route, payment services like EMC2 Billing might be the right option. If Paypal shuts you down, get started with EMC2 Billing for the merchant service you deserve.

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