The Dangers of Paypal For Freelancers

A friendly warning, repeated again, to any freelance tech support people or tech people in general who like to help their friends.

If you provide something as simple as support to a user, or share a computer with a friend/family member who’s Paypal account gets banned, yours will be linked to it and also banned. It doesn’t matter if your account is in good standing, as soon as money enters your account, Paypal will hold on to it for half a year and ban you.

A simple, common scenario. You work on a website, this website is set up to accept Paypal (your client’s account). In order to setup API, testing and other things, you log in to their account. You also log in to this account for tasks they ask you to do, because they do not know how. Things go fine. Project discontinues due to various reasons. You still get small payments from the client directly for other odd jobs. Your client then emails you telling you they are banned for some reason. You check your Paypal email address (15 years old) and guess what? You were banned too! Even though you had no involvement with what got the client banned, you were banned for guilt by association.

Now due to Paypal’s overwhelming monopoly on online payments, you have trouble getting paid. Clients and people wonder why you can’t take Paypal when most others can. Many online design marketplaces, especially startups, only pay out with Paypal. You are now cut off from those markets unless you can find someone trustworthy to accept payments on your behalf. Or go through the troubles of trying to get another account (harder and harder these days because of all the personal information needed) only to eventually have it closed as well due to rumored lifetime withdrawal limits that can only be lifted by given an SSN (EIN apparently doesn’t count anymore!).

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