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All experienced PayPal Merchants are familiar with having their PayPal accounts locked, limited, restricted for 21 days, 180 days, or being requested to verify their accounts. Although account limitations are common, not every Merchant knows which rules of PayPal they have violated.
Understanding the common rules that many businesses violate on PayPal can help you navigate these challenges, understand why your account may be restricted, and prevent PayPal account issues.
Our article offers you insights into the reasons behind PayPal account limitations and strategies to avoid them for good.
1. Why your PayPal account may be limited/restricted?
Your PayPal account may face restrictions and limitations for various reasons, aside from temporarily banned access during account verification or underwriting processes. the table below shows you common causes that you may encounter for PayPal account limitations.
| Causes | Descriptions |
| Your account does not comply with regulatory requirements |
A merchant sells fake, pirated, trademarked, or counterfeited goods, or sells goods illegally, etc. (Note: these are serious violations). Or you use PayPal for unauthorized purposes that violate regulatory requirements. Serious violations may lead to account suspension. |
| High number of Refund & Chargeback Requests | If there are too many refund and chargeback requests, reports, or complaints, etc. Paypal may remove your account access to check on that and request the Merchant to solve these problems. This problem has become very common recently as many store’s supply chains were affected by COVID. |
| Sudden, rapid changes in product or sales volume |
If the PayPal Merchant starts to sell an entirely new type of product, specifically higher-end items, or there is a rapid increase in sales volume, the account may be limited for PayPal to review it. However, you can avoid this problem if your account was properly set up and you notify PayPal about the changes – please contact Global Link Asia Consulting for more details. |
| Unauthorized use of the Account |
If PayPal believes someone else is using an account without its true owner’s knowledge, the account could be limited to protect the owner while PayPal investigates suspicious transactions. Also, accounts may be limited if the account owner’s debit or credit card issuer or bank notifies PayPal that someone has used his/her card or bank account without permission. |
| Disputes between seller and buyer | Disputes arising from issues like misrepresented products, defects, or low-quality items can lead to conflicts between the seller and buyers. |
| Violation of PayPal's User Agreement | Engaging in activities contrary to PayPal's User Agreement, such as illegal sales or misuse, suspicious transactions, or activities indicative of fraud may prompt PayPal to limit the account for investigation. |
| Unauthorized Card or Bank Account Use | Notification from the card issuer or bank about unauthorized use may lead to account limitations. This is a protective measure while investigating unauthorized transactions. |
Besides, Merchants can also be the victims of online fraud. Frauds can lead to a surge in refunds, chargebacks, and disputes. Some common frauds are:
| Types of online frauds | Descriptions |
| Using stolen cards |
A buyer can use the information of a stolen credit card for online shopping. The fraudster may have the physical card, but most of the time the detailed information of its owner has been stolen somehow. |
| Hacker tests a stolen card (Card testing) | This is when a card (or multiple cards), that might have been stolen, is tested on a website to see whether it is valid before being used for fraudulent payment on another website. Using CAPTCHA or implementing rate-limiting charges may help avoid this kind of fraud. |
| Using fake emails |
There are a lot of frauds using fake emails, email phishing, etc. to trick the merchant into believing that payments have been made, or to steal the merchant’s PayPal account information. |
| Stealing PayPal account information | The fraudster can log in to someone else’s PayPal account to purchase and pay for the goods using that account. If the holder of the stolen account reports it to PayPal, the Merchant will also be impacted. |
| Friendly Frauds | Friendly fraud happens when a legitimate cardholder makes a purchase which is disputed at a later date. This may be unintentional because he did not recognize the transaction on his statement or intentionally (for example, the buyer regrets buying the goods; it could also be a fraudulent attempt to have the goods without paying for it, or it can also be unfair competition). |
2. How to check if your PayPal account is limited?
If you suspect your PayPal Business account is restricted, you can check your account status via email or notification from PayPal. You can log in to your PayPal Business account and go to the Resolution Center. In this section, account holders can have details on what the limitation is and can also send requested information to resolve the issue.
If you receive an email claiming that your PayPal account is limited but cannot find corresponding information in the Resolution Center, it could be a phishing attempt. Here's what you should do to address this situation:
- Forward this email to
This email address is being protected from spambots. You need JavaScript enabled to view it. for PayPal to investigate it
Send the suspicious email to PayPal for investigation by forwarding it to
- Delete the Email
After forwarding the email, delete it from your inbox to prevent any accidental clicks on potentially harmful links. Run a thorough anti-virus or anti-malware scan on your device to ensure that no malicious software has been downloaded. As an additional security measure, you should change your PayPal password and security question.
- Monitor Account Activity
Keep a close eye on your PayPal account for any unauthorized or suspicious activity. Regularly review your transactions to ensure they are legitimate and wait for PayPal's response on your issue.
3. Does a limited PayPal account have any impact on your business?
A limited PayPal account often faces restrictions on sending or withdrawing money, and PayPal typically communicates such limitations through email notifications or warnings visible in the account. The frequency of PayPal account limitations may vary, and users are usually informed in advance.
Despite the occasional limitations, PayPal remains a popular and widely used payment gateway. The significant growth in PayPal's total active user accounts, from 84.3 million in Quarter 1, 2010, to 428 million in Quarter 3, 2023 (a fivefold increase), highlights its attractiveness for merchants involved in international transactions.
The continuous growth in user accounts shows that, for many users and merchants, the benefits of using PayPal outweigh occasional limitations. PayPal's convenience, global reach, and security features contribute to its widespread adoption in the online payment landscape.
4. What can you do to avoid PayPal account limitations?
Depending on the specific reason, you as a merchant can apply 3 different solutions below to avoid PayPal limitations and restrictions on your PayPal account or quickly resolve PayPal limitations.
When PayPal places limitations on an account, it often requests certain credentials and supporting documents to resolve the issue. These documents may include:
- Invoice from Supplier
- Information about Various Payments
- Proof of Shipment, Order Tracking Information, Buyer Information
- Proof of Address
- Proof of Identity
Submitting documents to PayPal can be a sensitive process. Common issues arise when merchants provide incorrect information or fail to meet PayPal's document requirements. This can result in prolonged verification times, delays in dispute resolution, and potentially losing a dispute case. In some instances, PayPal might impose a 180-day limitation on the account.
Given our experience in handling various cases, we can offer advice on the best approach to navigate these situations. However, it's important to note that we can not guarantee support for PayPal Personal accounts or limitations related to policy violations or poor store performance.
For personalized assistance, you can contact us directly for more detailed guidance.
To protect against fraudulent activities and maintain a secure business environment, you should implement the following strategies:
- Watch for Red Flags: Be cautious of urgent delivery requests, partial payments, or split payments between multiple PayPal accounts, as these can be signs of fraudulent activities.
- Verify Addresses: Double-check shipping and billing addresses to ensure they match before shipping high-value items.
- Request Signature Verification: When dealing with high-value items, ask for verification of the receiver's signature to mitigate the risk of "friendly fraud."
- Utilize PayPal Buyer's Protection: Sign up for PayPal Buyer's Protection, which actively tracks transactions to detect any signs of fraud promptly.
- Block Problematic Customers: Take action against customers with a history of disputes or fraud complaints by blocking them, preventing long-term issues.
- Read PayPal's User Agreement: Familiarize yourself with the terms of use outlined in PayPal's User Agreement to reduce the risk of account locks.
Claims are among the top reasons for PayPal’s quick actions to restrict your PayPal Business account for investigation so you should try to limit as many claims as possible. Here are some practical tips that you can start right away for your online store.
- Preventing "Item Not Received" claims with proof of delivery. The proof can be an order confirmation before shipment, a shipment tracking system, or any shipping insurance can be of great help to relieve customer anxiety.
- Preventing "Not as Described" claims. You should ensure product listings have accurate written content, high-quality photos, and detailed dimensions to set clear expectations. In addition, you can encourage customers to read your FAQs and reach out via phone or email with any questions before placing an order.
5. How can we help you avoid PayPal account limitations?
Global Link Asia Consulting, as your trusted one-stop corporate service provider helping hundreds of business owners start their businesses overseas and manage their companies with success, we can
- Provide advisory services for international monetary transactions, optimizing business cash flow;
- Do PayPal Underwriting to get access to PayPal Pro and advanced features;
- Assist in registering and maintaining VIP accounts with international payment gateways, offering faster processing and lower fees.
- Offer guidance on compliance with payment gateway User Agreements and help resolve disputes.
- Help you create new PayPal Business accounts, crucial for those with prior account issues or high transaction volumes.
- Advise on strategies for increasing transaction limits with PayPal and avoid PayPal limitations and restrictions.
In addition, we offer corporate services for entrepreneurs in PayPal, Stripe non-listed countries wanting to set up their PayPal Business Account:
- Register a company in Singapore; Hong Kong, and the U.S;
- Open a corporate bank account in Singapore with a 99% success rate;
- Choose the right company types for tax optimization in Singapore;
- Apply for business licenses;
- Get an affordable, professional registered office address for business;
- Support to open, authenticate, and manage Stripe Paypal Business in Singapore, Hong Kong, and the U.S;
- Handle all your tax accounting needs, timely annual filings, auditing, and more.
6. FAQS about PayPal account limitations
Traveling abroad can cause your PayPal account restrictions. You should set up a Travel Profile on PayPal before your trip: Simply log in, go to Profile & Settings, and enter your travel details with contact info. In order to successfully set up your Travel Profile, your trip must begin within 30 days and cannot last more than one year.
Transfer limits and PayPal account limitations are related concepts but not exactly the same. Transfer limits typically refer to the maximum amount of money you can move in or out of your PayPal account within a specific period. These limits can vary based on factors such as your account status, verification level, and transaction history.
On the other hand, PayPal account limitations are restrictions placed on your account for various reasons, such as security concerns, regulatory compliance, or unusual account activity.
You should follow the instructions provided in the Resolution Center. PayPal may ask for additional information or documentation. Besides, you can seek a professional who can help you expedite the resolution process promptly. We can help you solve any of your PayPal-related problems.
The resolution time varies based on the complexity of the issue and how quickly you provide the requested information. In the most serious case, it takes PayPal 180 days to investigate and remove your account limitations. So the quickly you follow the instructions of PayPal, the quicker the process to remove restrictions is.
With over a decade of experience serving as a trusted partner to more than 750 business owners seeking professional development and breakthroughs in the international market, we are an expert strategic corporate service provider helping you incorporate and operate successfully in 10 different countries
Our areas of expertise include:
- Strategic Consulting and Company formation in over 10 different countries worldwide such as Singapore, Hong Kong, the U.S., Australia, Thailand, Malaysia, and offshore destinations like BVI, Belize, Seychelles, and more.
- Account opening for personal and corporate bank accounts, as well as setting up PayPal and Stripe gateqays in countries like Singapore, Hong Kong, and the U.S..
- Tax Consulting and Preparation for SFRS IFRS financial reports, corporate income tax returns, VAT/GST (Value Added Tax/Goods and Services Tax), and more.
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- Registered adress;
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With over 10 years of experience and a team of experts with 5 to 25 years of experience (international standard certifications) as well as direct partnerships with institutions such as OCBC, UOB, DBS, PayPal, and Stripe, we are proud to offer professional, legal, transparent, sustainable services with no hidden costs.
Global Link Asia Consulting Pte. Ltd. is pleased to announce the publication of the above insightful and informative article on our official website, Global Link Asia Consulting on 28th April 2021. The copyright for this article is exclusively held by Global Link Asia Consulting Pte. Ltd. Any unauthorized reproduction or distribution of this content without our express written permission is strictly prohibited. We value the protection of our intellectual property and appreciate your cooperation in adhering to these guidelines. Thank you for your continued support of Global Link Asia Consulting Pte. Ltd.
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