Well it had to happen sooner or later and in my case it’s been later, but happen it has and I thought I’d share my story with you to file away for reference.

PayPal have limited (frozen) my business account possibly for up to 180 days.

That means I can receive payments but not withdraw or send money.

As far as I can tell the reasons are pretty much the same as we’ve all seen given in umpteen other incidents. Too many payments in too short a period of time (unusual activity) combined with a higher than normal rate of chargebacks (even more unusual activity).

Quite frankly it’s a bit of a nightmare as you can probably imagine.

When I saw several chargebacks come in just over a week ago, I phoned PayPal and asked them what they thought was going on and that I was concerned about my account. They were nice about it but even so I was quite worried having read all the horror stories.

One of them started talking about the “limitation” on my account (even though I couldn’t see anything wrong) and I then got passed to the chargebacks department who told me there wasn’t any limitation which tied up with what I was seeing in my PayPal account when I logged in.

Then two days later my account became limited. Hah!

I phoned them again and they said it would take 48 hours to unlimit my account after I’d given them proof of who I was (again) in the form of a bank statement and passport. I’d already done that before I phoned so I was hopeful.

But then the dreaded 180 day email came in.  :-(

I’ve spoken to them again and explained my business model to the very helpful guy and even pointed out that one of my products was SmartDD which uses the PayPal IPN system to do order fulfilment and digital delivery. He was very consoling and I could hear him tippy-tap typing away while I was talking and then he said something like “I’ve sent in an appeal for you as you seem like a very genuine and reasonable person, so hopefully the account will get unlimited for you soon.”

I’m not so sure…

He then went on to tell me that 180 days was actually the longest period anyone would have to wait and that it was actually reviewed every 30 days. Even so I’m not very hopeful.

That’s my sob story, now what does it mean to you?

Well, if you’re a subscriber to one of my services or memberships then it looks like direct subscriptions will continue to work and everything should be okay for you, and as I said earlier I can even continue to receive payments. However there’s one subscription service I tried as an experiment that I may have to cancel and that’s for the ThemesXD themes.

The subscription payments were supposed to come in over the last 2 days but nothing happened and I’ve now realised that’s because I used JV Zoo and PayPal Adaptive Payments.

Now then. Pay attention and learn something important that I’ve just learned over the last few days.

Avoid PayPal Adaptive Payments at all costs.

If you’re going to use an affiliate scheme, use the rotating payments method instead. This is a simple system where if the commission is 50%, it means you get one payment and the affiliate gets the next and so on so that you both get every other sale, ie 50%.

That’s nice and safe because even if PayPal freeze your account, your affiliates won’t suffer as they’re paid directly into their accounts and the payments that you get just sit in your account until the day PayPal unfreeze it.

That’s then a happy situation for your affiliates and a not so disastrous situation for you as at least one day the money will eventually become available. So not great, but also not very bad.

As it stands I’ll have to cancel all the ThemesXD Adaptive Payments pre-approvals and ask members to re-subscribe. But I’ll probably throw in some goodies to make it worthwhile so it should be okay with everybody I hope. I may even do it completely differently this time round.

As for what other changes I’ll be making then you’ll see me using ClickBank more often as that means you can still use PayPal and I’ll still get paid, so that could be the best solution for now. Especially as I own a couple of “warm” CB accounts that are verified and will send me money directly to my bank account every 2 weeks.

I’ve also kicked off the process for a 2Checkout account, and today I took a look at Payza.com which used to be AlertPay. It looks very interesting and seems to now have a lot of the same functionality as PayPal.

Apparently they’ve merged with a British company too.

However when I tried to sign up I received a message that said “United Kingdom, we are coming soon!” so I rang them and the guy said they were doing a lot of system changes and integration and that the UK would go live early in the new year.

Okay, I’m looking forward to that and I hope it’s worth it.

(It seems that for their new systems they’ve concentrated on the US, Canada, India and Bangladesh to begin with, plus lots of other countries, but not the UK yet.)

If you know of any decent payment processors or have anything to add about any of this, then by all means please leave a comment.

-Frank Haywood