Recently a story gained a lot of attention regarding a business who had their account frozen due to suspicious activity. The condensed version of that story is that the business was legitimate, customers were happy but PayPal kept freezing and asking for further details on transactions. This is but one of many similar stories I have heard over the years. But then the CEO of PayPal reached out, removed the freeze on his account and said he is working to fix PayPal’s continuous mistakes. After that I held a glimmer of hope that PayPal might be turning a corner.
I was considering should we risk continuing to use PayPal or should we shut it down and only offer credit card payments. As a business, our merchant account has lower rates/fees and is same business day deposit in our account, compared to PayPal’s higher fees and 3 days wait, once you manually withdraw, but I hesitated as we wanted to provide options for people to pay. Currently 30% of people choose to pay via PayPal with Binkd.
Soon after I received a notification saying my account was limited pending further information. I had to provide documentation on my business to comply with the Anti-Money Laundering and Counter-Terrorism Financing laws. As you know Binkd is really just a front for a large money laundering operation (this is sarcasm just to make that clear). During this time we could receive payments but couldn’t withdraw any funds. I sent off the information and was told to wait 72 hours. There were also some issues with providing the information and once they sorted them out I had another 48-72 hr wait.
Then a few days later I receive a notification saying our PayPal account is closed. As I was unaware, trusts are not allowed to own a PayPal account. They are apparently uncommon in the US but very common here in Australia and PayPal don’t allow them at all. At least they released the balance in my account before it was closed.
There is nothing I can do about this and I am not even concerned about it, PayPal made my decision for me. I apologize to those who prefer to pay via PayPal, they are great for the buyer, just not for sellers. As usual our secure credit card option has and will continue to be available, this has always been the most preferred way to purchase for most people.
Will this affect sales at Binkd? We don’t know the answer to that yet, at the end of the day, I enjoy not having to worry about PayPal and doubt they will have much of an impact on sales. The small dent they may make for people who don’t go over to credit card payment from PayPal will most likely be neutralized by the savings in fees. They are now irrelevant to us and decreasing in relevance to many more business owners.
Update: I just wanted to make it clear that PayPal didn’t do anything wrong in this situation and I am not saying that they did. The point of this article was to show that leaving PayPal is not a big deal and their policies are turning away legitimate businesses. This was also a notice to our existing customers that PayPal is no longer available and why it happened.
I have had my horror stories with PayPal over the years. When everything is working well, PayPal aren’t that bad, however as soon as you have to contact support, prepare for headaches. I just chose not to make this a huge negative post and focus more on the moving on to smoother sailing.