Is PayPal Holding Your Funds?

Oct 14, 2013

Some disturbing facts have come to light about PayPal and their policies with your money and release of funds. Most states have a law in place that works like this: “Every licensee or its agent shall forward all money received for transmission or give instructions committing equivalent money to the person designated by the customer within 10 days after receiving that money unless otherwise ordered by his or her customer.” According to Allen Golden, the wording of the law is to protect the consumer against fraudulent activity by companies, that are to release the money to consumers for their wares or sales. Allen is the public information officer at the California Department of Financial Institutions, the state where PayPal is based.

PayPal’s Policy

PayPal’s Policy reads quite another way to avoid this law. It’s confusing at best, why and how, a company this large is getting away with not complying with laws in the state they live in. Section 10.4 of PayPal’s policy reads this way.  “If PayPal places a hold on any or all of the payments you receive PayPal will provide you with notice of our actions. PayPal will release the hold on any payment after 21 days from the date the payment was received into your Account unless you receive a Dispute, Claim, Chargeback, or Reversal or PayPal has taken another action permitted under Section 10. PayPal, in its sole discretion, may release the hold earlier under certain circumstances, for example, PayPal may release the hold earlier if you have uploaded tracking information. If you receive a Dispute, Claim, Chargeback, or Reversal, PayPal may continue holding the payment in your Account until the matter is resolved pursuant to this Agreement.”


At twenty-one days the seller is ready to strangle PayPal and if they ever get their cash, they won’t go back. It is entirely an option to go to other merchant account services and get a merchant account with no reserve placed on it. Customer service is usually great for all merchant services businesses. Find that one that will work with you and will answer your cries for help.

Don’t be afraid

With PayPal having this issue, don’t be afraid to research and venture elsewhere. The market is flooded with wonderful merchant account servicers that have immaculate customer service. You shouldn’t have to wait for the money you earned. It’s just that simple.



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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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