PayPal Problems and Issues 2023

At one point, PayPal was one of the top payment processing solutions for small and medium-sized businesses. Many businesses are still using PayPal even to this day, despite the issues that have arisen with the platform. Owners and freelancers have reported more complaints about PayPal’s platform than ever before. So, what happened to PayPal’s quality and customer service? We’ll discuss all the PayPal problems and issues 2023, why you shouldn’t use them, and alternatives to use instead.

How PayPal Has Been Used By Businesses

Since its inception, PayPal has been an online processor for businesses. They tout themselves as offering reliable payment services for products and services. They offer both online (PayPal Business) and in-person (PayPal Zettle). Today, PayPal has over 325 million active accounts, in 200 markets and 100 currencies around the world. However, despite it’s widely used platform, PayPal isn’t the perfect solution for every small business.

PayPal Problems and Issues 2023

From “Intolerance Fines” to merchants losing money, PayPal has its fair share of controversies. These are a few of PayPal’s problems and issues in 2023 that are plaguing the company.

Fines For “Intolerance”

Tolerance and diversity are among the hot topics of 2023. However, the controversy is when it gets pushed at the expense of civil liberties. PayPal has recently updated its user agreement.  There is a new policy update that will permit PayPal to fine users who push “misinformation” or present risks to a user’s “well-being”. The fines are up to $2,500 per offense. This will be made at the “sole discretion” of PayPal. In the user agreement, there is a provision in which account holders acknowledge that the figure is “presently a reasonable minimum estimate of PayPal’s actual damages” due to the administrative cost of tracking violations and damage to the company’s reputation.

You read that correctly. So if you’re in violation of their policy on “Intolerance” and “Misinformation”, you will be fined $2,500. In a twist of events, PayPal ended up reversing its policy to fine users $2,500 for “misinformation’. Regardless, it is reprehensible that PayPal was about to implement this policy.

Censorship Via Suspended Accounts

Merchants have reported that PayPal has suspended their accounts over content. The payment processor is particularly targeting businesses and organizations with conservative leanings or unconventional views. Several U.K.-based news organizations – Free Speech Union and The Daily Sceptic, have published stories that were critical of the COVID-19 lockdowns. In September of 2022, PayPal removed their access to funding. PayPal’s software was embedded in their payment system. So as a result, the sudden closure of the accounts posed a threat to the business.

Using force to freeze online forms of money can destroy a business economically, and limit its ability to exercise its political voice and beliefs. This could mean life or death for your business.

In a statement to Fox News, PayPal stated that it is: “dedicated to providing safe and affordable financial services to people of all backgrounds with a diversity of views. We also take very seriously our responsibility to protect buyers and sellers, while working to ensure that our services are not used for fraudulent or illicit activities.”.

Is “Big Tech” To Blame?

Massive tech-based companies like PayPal are unable to be properly held accountable. Since it’s their own platform, PayPal has the jurisdiction to create their own policies and contracts that allow them to remove users with no explanation. Many tech companies are in a position where they are large enough to be able to avoid the pressure from civil society. It is to the point where there is a debate as to whether these companies are violating users First Amendment rights. It comes to the point where a few hands at PayPal can wield power over online speech.

PayPal’s Reputation For Putting Funds on “Hold”

Another issue that online merchants have had with Paypal is having their funds “put on hold”. This is a very frustrating and nerve-wracking experience, especially for merchants who primarily process payments through PayPal. There are a few reasons that PayPal puts your funds on hold.

  • Your PayPal account is inactive
  • You are a new seller
  • The online store hasn’t sold anything in a long time
  • You received a payment that is unusual for your typical selling pattern
  • PayPal has found an unusual change in selling price for a transaction
  • Customers have filed formal complaints, asked for a refund, dispute, or a chargeback
  • Your store sells bigger ticket items (tickets, consumer electronics, computers or travel packages)

There are several ways to possibly prevent the delay of funds from PayPal. The first thing you should do is checking your email on a regular basis for any updates about your “PayPal balance” or information as to why your funds are not available.

To prevent refunds, disputes and chargebacks from buyers, make sure you are using real photos of the items you are selling. In addition, make sure that your product or service listings include detailed, accurate descriptions, and that you are transparent about shipping and handling costs. Lastly, make sure you are providing the best customer service to your buyers. This will ensure that they do not have any complaints.

Other Issues With PayPal

Aside from censorship, suspending accounts, and holding funds, there are other issues associated with PayPal.

  • The limited terms of use are subject to account suspension at any time, which can result in frozen funds
  • It can take up to three days to receive your funds
  • It is difficult to contact PayPal’s customer service department

What To Use Instead of PayPal

There are several payment processor alternatives that businesses can use instead of PayPal. Some popular alternatives include Stripe, Square, and Venmo. For our clients, we typically recommend Stripe. It integrates with Shopify and WooCommerce, making it a great option for e-commerce businesses. Amazon, Google, and Lyft all use Stripe in some capacity, according to the company’s website.

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