Although Paypal and the bank are similar in some aspects, they are two different entities that operate under different authorities. And each entity is not allowed to impose any limitations on other territories. In that sense, PayPal does not have any direct control over your bank account but can put restrictions on your PayPal account only.
However, when PayPal freezes any particular account, the respective account holder cannot transfer money to their bank account, which means it can indirectly freeze the individual account holder’s linked bank account. So you need to be more concerned about PayPal’s restrictions on PayPal accounts. Let’s explore more about tissue.
Relationship between PayPal and Bank Account
PayPal is an online platform through which its users (business and personal) send and receive money. On the other hand, banks also send and receive money, but they are not limited to transaction activity only. Instead, they help people deposit their money, invest, and do many other activities.
So PayPal can be considered a partial online bank but not a bank due to its lower involvement in other banking activities. However, their transaction to be made more clearly requires the involvement of a bank; PayPal is somehow dependent on banks to send their users money to their bank account.
To do so, Users need to link their bank accounts with their PayPal accounts. To complete this process, they must provide PayPal with the necessary details of the bank account, which involve the bank account number, name, or branch location.
Once combining the PayPal account with the bank is done, users can send money from PayPal to their bank or from their bank to PayPal. So overall, the primary relationship between banks and PayPal is to ensure the smooth movement of transactions between two entities.
Can PayPal Freeze Your Bank Account?
As stated, PayPal does not have direct control over freezing your bank account. Still, when you are restricted from transferring money from your PayPal account to your bank account, it means Paypal is indirectly freezing your linked bank account. Let’s explore the dynamics between the bank account and the PayPal account.
Reasons behind Freezing PayPal account
You cannot send or withdraw money if your account is frozen or restricted. As soon as PayPal limits your account, they will let you know the reasons behind the limitation by sending you an email.
There can be many reasons, and, depending on the reasons, they will ask you to complete some steps. By responding to their query, you can remove the limitation. Here are some common reasons:
When PayPal needs to meet regulatory requirements?
Sometimes users request PayPal for certain products like debit cards, which require them to obey government rules and regulations; PayPal puts restrictions on your account for a certain period to meet these requirements.
Selling Banned Items
Paypal strictly restricts the sale of banned items such as firearms or prescription drugs. Therefore, selling prohibited items violates their policy, so PayPal may limit your account.
To Protect your Account from Fraud
If PayPal detects any fraudulent activity in your account, they may freeze it. These activities include accessing your account without authorization, unauthorized transfers from PayPal to your bank, and someone using your debit and credit cards without your permission.
Transferring Huge Amount
If you receive a larger amount of money than you usually receive, PayPal may consider the amount illegal. So they may put restrictions on your account and ask you some relevant questions about the source of the money.
Sudden changes in your Business activity and volume
If your sales performance reduces, like when more buyers ask for a refund, PayPal may limit your account. Also, if you start selling a more expensive and entirely new product, PayPal may freeze your account.
In many cases, if your sales volume rises above average, PayPal may limit your account.
Never Used the account after Signing up.
Last, they may limit your account if it is not used for a long time. You must prove your identity by providing them with the necessary details to restore your account.
What you must do if your account is locked?
Usually, you will get an email. If not, find and go to their ”contact us” page. You will have the option to call them at the bottom of the page. In most cases, PayPal needs this basic information from you to restore the account.
- Bank account statement
- Credit card statement that is linked
- Your email address
- Your Telephone Number
How can you Prevent Paypal from Limiting your Account?
Prevention is always better than cure because cure wastes money and time. To prevent future hassle, you can do certain things so account freeze does not happen. Here is what you can do.
- Let PayPal know your big move ahead of time. If you launch a new product, let them know because such a move will likely increase your transaction volume, among other things.
- Let Paypal know your business and tell them not to restrict any significant amount.
- If you have both a debit and credit card, link both to your Paypal account.
- Ensure there is no discrepancy between your PayPal account and bank account names.
- Also, make sure to use the exact address and phone number.
How Long Does Paypal Hold Your Money, and Can You Sue Them?
As per the policy, PayPal can freeze your account for 180 days. However, depending on the severity of the problem, that only occurs occasionally; generally, they resolve the issue within a few days.
On the other hand, if you want to sue them, especially if the amount is more than $10000, you certainly can do that, but there is a chance that the result will come against you.
Also, suing such a big company is not a wise decision if you are not big. Instead, cooperating and solving the issue is a better idea.
What to do if PayPal is not available in your country?
Unfortunately, PayPal is not available in many countries. If you live in one of those countries, PayPal does not facilitate transactions for your small business.
No worries if you do not have a PayPal account, or if PayPal is not available in your country, provide a verified PayPal business account. Here is what we offer:
Business and personal Paypal accounts include verified phone numbers, bank, cand, and SSS. You will also get a Paypal email. And login ID verified as a UK resident. To learn more about our services, check out our website here.
FAQs
Hopefully, the above discussion helped solve the account freezing issue. Still, you might have some questions. Here are some frequently asked questions that you might want to know.
Is it safe to link my bank account on Paypal?
It is a common practice and necessary to link your bank account with your Paypal account. And it is safe, and Paypal is serious about securing bank information. They use technology like end-to-end encryption on every transaction.
Is making transactions in a PayPal account safe?
Paypal uses technology to secure your account from theft. Some people are concerned about hacked PayPal accounts, which is highly unlikely. Until the hacker has login details,
What is a PayPal account limitation?
Paypal account limitations refer to restrictions on any account preventing users from sending and withdrawing money. It can hold money for six months. The main reason for account limitations is to ensure the safety of both buyers and sellers.
What are the alternatives to PayPal?
If PayPal is unavailable, you can buy a verified account or use PayPal alternatives. Some popular options include Wise, Google Pay, Payoneer, Stripe, Shopify Payments, and many others.
Final Words
So there you have it. Here is our final advice, no need to be worried if PayPal freezes your account, which is a very common event.
Most importantly, the purpose of freezing an account is not to hold or seize your money; it is a process to protect your account from threats and ensure safety. Also, ensure you know why your account might be restricted because knowing them will help you avoid future restrictions. And to deal with any issue, contact PayPal directly.
