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PayPal is a small business killer

I’ve had a PayPal account for 10 years and have been selling products online for 7 years. I spent the last 18 months working on a new product to help people learn languages. It’s been tough at times, with little money to make it to the next month. But I believed in my idea and kept at it! My take on the American dream if you will, even if I’m from Europe.

In May, I finally launched the product. A lot of people signed up for it and are loving it. I made 30,000 EUR (33,000 USD) in 5 days with another 3,000 EUR planned monthly in billing for another 11 months.

I’d heard about a couple of people who had their money frozen by PayPal for a while. So I transferred part of it ASAP to my bank account. My mistake is that I kept _some_ of the money on PayPal, planning to use it to pay for the business. What a mistake it was…

After blocking my account for a week, PayPal ended up freezing 15,000 EUR (16,750 USD) on my account. That’s half the money I made!! I can understand they need Reserves and protections against fraud. But I’ve been doing business with them for 7 years! I’ve paid them over 4,400 EUR in fees over the years. And my refund rate is 1.55%, nothing like the 50% they froze on my account!

This means that I currently have 0 EUR available on PayPal and cannot: refund a customer, pay a partner or pay freelancers that help me create the product. I was planning on proposing to my girlfriend and cannot even buy the ring now.

I’ve been trying to get in touch with the team in charge of Reserves for DAYS but their service is never available. Nor do they return phone calls, even if the first-level help-desk asks them too. They’re crippling my business and treating me like crap. It’s no way to do business — but probably a good way to try and kill a small business who’s trying to create something and bring value to this world.

I’m planning to take it to customer-protection agencies in Europe and Luxembourg (where PayPal Europe is based) to get them to fix their ridiculously high Reserve.

Good luck to other users out there

Posted: July 15, 2015 at 6:55 pm


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