PayPal is a handy and trusted online payment solution provider around the world. It’s been here for more than two decades. You can only imagine how easy it made our lives thanks to the numerous features it keeps introducing us to. However, once in a while, people hit some snags as well.
One of them is “Account Limitation.”
Simply put, account Limitation is one of its features that prevents a user from accessing his account by temporarily disabling withdrawal, sending, or receiving money.
Limiting an account doesn’t necessarily mean that something bad has happened. Rather, it’s been imposed against your account to help you protect yourself from potential risks associated with it.
If you are running an online business using this service, it’s likely that you will be facing PayPal limits if you aren’t aware of the reasons for an account limitation.
In this piece, we’ve tried to talk about the PayPal account limitation and why they are placed on your account, and what you should do to remove it to come back to business again.
Besides, you’ll be able to avoid future account limitations by following certain PayPal compliances discussed here.
Discussing Account Limitations in Detail
Usually, there are no send money or withdrawal limitations in PayPal. As a small business owner, you are free to send, receive, and/or withdraw money whenever you want as long as your account is verified. But if your account runs into something that creates conflict with PayPal policy, it’ll be limited.
This limitation could particularly be imposed on withdrawal, send or acceptance of money, or in worst cases: everything. During the limitation period, you won’t be able to pay your vendor or continue processing any of the financial transactions. You can translate it as an account seizure.
If you face PayPal account limitations without any reason, then you should feel better knowing that they must have found suspicious activity.
So, while they are investigating the matter behind the scene to make sure it wasn’t an imposter who tried to take advantage of you, your account should remain limited to avoid any potential financial impairment.
However, you’ll still be able to access your account insights by logging in. But without the limitation being lifted, you won’t be able to move or add any amount to the account. Luckily, you can go to the PayPal Resolution Centre from the website to sort things out.
Why Do PayPal Put Limitations on an Account?
To be honest, you’ll find several reasons for a PayPal Limit. As a business owner, some of them might seem appropriate to you, and a few of them may not make any sense at all. However, PayPal will notify you with an email explaining the reason behind the imposed limitation.
Unauthorized account handling could be one of the few reasons that could lead to an immediate PayPal limit. If someone enters into your account and tries to move money, chances are there that PayPal will understand it with their fraud detection tools, and the result: account limitations.
Similarly, the bank account or the credit/debit card associated with your PayPal account could end up in the hands of an unauthorized person. If the associated bank or card issuer sends a signal stating that something wrong had happened to it… then, your PayPal account could be immediately limited.
Another common reason behind the PayPal limit is the breach of agreements. For instance, you are not supposed to raise funds using your PayPal account that is registered with business terms. Hence, the account will be placed with a limitation.
Well, you can still receive donations to your account. But according to PayPal regulatory requirements, any account that wants to receive donations should provide documents to make sure that it is opened for a registered non-profit organization.
So, you should follow PayPal’s Acceptable Use Policy to make sure you are not violating the code of conduct. You’ll end up with account limitations if you sell any banned item such as drugs or guns through your online store.
Radical changes of a transaction might also lead to account limitations. For example, you’ve been selling around $5000- $6000 for the last consecutive six months. But drastically, your sale has climbed to, say $50000, coming to the seventh month.
This uneven change will definitely raise the eyebrows of the authorities. As a result, a limitation could be placed against your account. They will investigate the matter and might ask for an explanation from you. As long as you aren’t coming up with a satisfactory clarification, the account will remain limited.
As a small business owner, it’s common to get chargebacks. You might not be able to satisfy all of your customers with your products. Hence, they can run into arguments and the ultimate resolution could be a return of funds.
But if your online store associated with the PayPal account faces a series of claims and chargebacks within a short period, PayPal may want to have a second look regarding the matter. So, they’ll temporarily stop you from selling any more products using the account by placing a PayPal limit.
Besides, you might get account limitations if you suddenly change the items or nature of your online stores and head towards accepting payments without notifying PayPal. Also, if someone files a complaint against your website or business, you’ll be handed a PayPal limit.
The last reason you’d want to know about the PayPal limit is rather unconventional. If you log into your account from a different location then you might be placed with a limit. Say, you are an EU citizen living in Germany, and that’s where you usually ran your account from.
But if you go on a vacation to Spain and log into your account you will get a warning. However, if you continue using it without taking the warning into consideration, chances are there that you’ll get limitations from withdrawing or sending money from your account.
Now, the question is why they’d put an account limitation if you are on a vacation? Well, it’s solely for your account safety. Though it is your own device from where the account might be operated, logging in from an unknown location is one of the common characteristics of any fraudulent attempt.
This is why PayPal takes this so seriously and prefers to stop the account to make sure it is not being mishandled. But you can prevent the account from getting limitations by simply creating a travel profile before your trip.
Log in from your trusted device to set up your travel profile. It’s better to log in from your computer. Go to Profile and Setting. You’ll be required to provide documents that validate your travel. These documents should clearly state your traveling period, date, and location you’ll stay during the trip.
Provide your mobile number and email address so that PayPal can contact you if it’s necessary. You should begin the trip within 30 days after setting up the profile and can enjoy the feature for the next 12 months. In case you need to extend it, call them and explain your reason.
However, setting up a Travel Profile doesn’t necessarily mean that you can use your PayPal Debit Mastercard on the go. So, if you wish to use the card while traveling, call them or send an email before you start sailing.
How Will PayPal Notify You About the Limitations?
Luckily, if your action doesn’t violate sensitive compliance, you’ll be notified with a warning message to your email or on the account overview page to sort things out. A quick response to the action may resolve the problem and prevent a potential account limitation.
But if you don’t get any notification and find out your account is in a limited state then you need to visit the resolution centre to know why you are facing the situation. In most cases, PayPal will request you to come up with some information to resolve the issue by themselves.
What are the documents asked from PayPal to resolve the limitations issues?
The information or documents required to resolve the limitation issue will vary depending on the nature of the problem. If you get a limitation that has nothing to do with your action (say, a security-related issue), the problem should be resolved automatically once PayPal fixes things out.
But if a placed PayPal limit involves buyer or seller’s interest, you might need to provide some documents to activate your account again.
For instance, PayPal may ask for your product’s suppliers’ invoice to make sure you are selling items from an authorized vendor. Also, invoices of payments, documents of shipments, tracking id, proof of address and identity as well as your updated personal and company information are frequently asked.
How long does it take to lift the PayPal account limitations?
Usually, issues related to account limitations take about three working days to be resolved. But this period can vary depending on the complexity of the issue. However, as a PayPal business account holder, your first and foremost duty would be responding to PayPal’s message as quickly as possible.
Adding scanned copies of supportive documents in response to PayPal requests will help you move the case with speed. This document forwarding process can take place numerous times and totally depends on them. You should keep your calm and provide them additional information if needed.
If you’ve completed all the steps from the Resolution Centre and still facing account limitations then it might mean that they have already reviewed your information and asked for an updated copy of the documents. So, you should check email frequently to make sure you aren’t missing anything.
Frequently Asked Questions!
Let me answer some questions which are inevitably causing you some headaches (trust me, I know)! I’ll update this section on a regular basis as time passes.
Would I face a limitation if I try to send more money than permitted?
No, you wouldn’t be placed with an account limitation if you try to send more than the permitted amount. For your clarification, it should be reminded that you can send up to $60,000 in a single transaction.
But it’ll vary depending on the currency you are sending. It can be limited to $10,000 for some cases. However, if you wish to send more than the sending limits allow, connect your bank account or credit card to the PayPal account.
I’ve completed all the steps from the resolution centre, why is my account still limited?
The first thing you should do is check your email again and look if PayPal has asked for updated documents. If you don’t find any, you should be patient, believing that they are working on it to resolve the issues as soon as possible. If it’s taking too much time, contact customer service directly.
Account limitation might seem a troublesome thing in the first place. But to be honest, it is one of the effective ways to protect both buyers and customers interests associated with it. In most cases, account limitation saves a business owner from huge losses by preventing counterfeit.
So, whenever you are facing a PayPal limit, try to provide requested documents as soon as possible to sort things out. Also, make sure to report to PayPal authority if you get any fake email claiming your account limitations to avoid unwanted circumstances.