What Merchants Say About PayPal
Reviews from Trustpilot, BBB, Reddit, and X with verified pricing and side-by-side comparisons. Every quote links to its original source.
Merchant reviews, in their own words
Every quote is verbatim and links to its original source. We pulled both complaints and praise because PayPal works well for plenty of merchants.
Account Freezes & 180-Day Holds
The most common complaint by far. PayPal limits accounts without warning and holds funds for up to 180 days — sometimes longer.
“PayPal have ruined my business, and now they are ruining my livelihood - $44000 restricted, my entire life savings for over a month, can't pay rent.”
1,361 upvotes, 474 comments. One of the highest-voted PayPal complaint threads on Reddit.
“I tried integrating them as a payment processor and after just 10 orders — all fulfilled, with no complaints or disputes — they blocked my account and froze the funds, telling me they'll let me know after 180 days how I can try to recover the money. Be very careful if you don't want to end up sending out orders for free.”
Describes PayPal as "pocketing the money on both sides" — refusing to refund buyers and refusing to pay sellers.
“PayPal just permanently limited my business account and is holding $10,000 for 180 days. I was using it for normal e-commerce sales. Unable to get a hold of support. The message they provided is they do not support my business model.”
7 upvotes, 64 comments.
“Permanently banned my account unexpectedly and are refusing to let me withdraw my $975. They wont even let me talk to a supervisor.”
“After my client has paid the invoice I have sent to them, paypal immediately limited my account once their payment of 100 usd went through. I have uploaded my national government id, proofs of fulfillment… my terms of services as an artist, and my multiple social media accounts… However, after just a day they immediately banned my account.”
19 upvotes, 38 comments. Account banned after first art commission invoice.
“Hi @PayPal you have randomly banned my account today. No warning or explanation was provided. The notice states that you will hold my money for 180 days. No reply from customer support. I intend to take legal action, and this will be made public to my YouTube audience as a PSA.”
1,025 likes · 84,178 views.
“Should I talk about how paypal took my $2500 I earned and withdrew from fiver to my paypal in 2019? They closed my account, held my money for 180 days and a day before withdrawal date, they took the money of my balance and withdrew to their own bank. I almost ran mad.”
2,720 likes · 105,592 views.
21-Day Payment Holds
Even without a full account limitation, PayPal holds individual payments for 21 days on newer seller accounts — including after the buyer confirms receipt.
“I received a $1,453.14 payment from a client in the UK for a digital service (3D asset work). My previous largest payment on this account was around $319, so this one was significantly larger. When the payment first arrived, PayPal placed it on hold for a 24-hour review… after the review finished it moved to a 21-day hold.”
Buyer confirmed receipt, but the hold remained.
“They have held over $39,000.00 in funds for over 2 weeks...PayPal says they can hold funds for up to 21 days.”
“I'm a contractor and this is my first time using PayPal to receive a payment. My client paid me $16,000 on Monday, and now the payment is on hold. The release date is scheduled for March 30, which is 21 days from when the payment was made.”
“PayPal is holding money for 21 days because I apparently made too much money this month, and it's suspicious… I had to put in a request to be able to get access to my own money, on the condition of expecting to do $20,000 to $50,000 regularly via PayPal.”
144 likes · 19,058 views. Blake advises: "Diversify your income streams, as well as your payment processors."
Sellers Lose Disputes Despite Evidence
Merchants report losing chargeback disputes even after submitting complete evidence — and having incoming payments clawed back to cover negative balances.
“I lost a chargeback dispute from a buyer, even though the buyer clearly scammed me… I submitted all the evidence I had, including screenshots of our entire conversation, the details of the deal, and even a full recording of our chat and the transaction.”
4 upvotes, 21 comments.
“I've used PayPal for 13 years as a business owner, and this is the worst experience I've ever had. A client accidentally triggered a dispute, then contacted PayPal to retract it—but my account was frozen anyway. I provided proof the service was fulfilled, yet no one at PayPal helped. Support hung up on me when I asked for a supervisor. I've lost income over a $35 claim that should've been resolved in minutes.”
13-year business owner frozen over a $35 accidental dispute.
“She is in communication with me and reversed it the same day. I've provided screenshots… proof from the bank with a case number that her fraud claim has been canceled. Paypal has these funds frozen and my account was at a negative balance. Any new payments i received to my account were deducted.”
3 upvotes, 13 comments. Bank confirmed fraud claim was canceled but PayPal still held funds.
“Sellers in my case, are offered no protection as for a buyer. A case was opened by a buyer seeking a refund and funds were immediately deducted from my account. Paypal allowed the buyer to keep my items after the case was decided in the buyers favor, although a label was sent to the buyer from me to return the products. Paypal did not enforce any seller protection. PayPal is like a sanctuary space for buyers only.”
“Stop Using PayPal Gs. Ive used PayPal for 8 yrs, won every single dispute with evidence. This last deal paid $740 for a card, it comes damaged, the seller admits he missed the damage, offers me $60, I say no, open a PP case and 4 wks later I lose. They no longer will protect Tcg.”
48 likes · 49,861 views.
Support Is a Chatbot Loop
The recurring complaint across every theme: PayPal's support is automated, tickets go unanswered, and there's no human who can override a risk decision.
“I have a business account that I no longer use for business. There is no option to downgrade that account to standard. The account processed a $20 transfer IN, but refuses to transfer it back out TO THE SAME BANK ACCOUNT IT CAME FROM… Because whenever I try to take a photo of my ID I get the error 'something went wrong.' I have opened three tickets through the useless chat interface but have received no response.”
144 upvotes, 165 comments. The top-voted thread in the pull.
“I have never dealt with a company that made such a simple problem so unbelievably difficult to resolve. My nightmare started when I reported fraudulent charges on my account. What should have been a straightforward fraud investigation turned into over a month and a half of phone calls, chats, emails, and hours wasted trying to get PayPal to do the right thing. In the end, PayPal didn't solve the problem. The only reason it was finally resolved was because I filed a complaint with the Consumer Financial Protection Bureau (CFPB).”
Had to escalate to the CFPB to get any resolution.
“Paypal has our account locked telling us we need to provide proof of business structure. We sent in the proper documents (partnership agreement) but it continually gets rejected. Paypal support provides no insight into why its getting rejected and also says the documents are all correct. We are in an endless cycle.”
“After ~10 years of running my business / freelancing, never once having a chargeback, only ever having to refund ONE client — I was randomly & wrongfully suspended from @PayPal @AskPayPal. Help me boost this post. Public attention seems to be the only way to be taken seriously.”
543 likes · 200,026 views.
“I provided my face to their AI system and a government ID and then found out my account had been deactivated.”
Completed identity verification and was still deactivated.
Fees That Add Up Fast
PayPal's per-transaction fees are among the highest in the industry. Even satisfied merchants flag the cost as a persistent drag.
“In 2012 PayPal alerted me they would hold 30% of my sales for 90 days after I had already been accepting revenue. Couldn't do a thing about it but wait. They lost a client for life.”
961 upvotes, 365 comments.
“I have used PayPal for over 15 years and have… sold hundreds of items… Now all of a sudden I sold a graphics card for $210 and all of it is now on hold for 21 days. The AI assistant is saying it's something to do with a PayPal reserve which I have never heard of. I have done probably $250k in transactions over the last 15 years.”
3 upvotes. 15-year merchant hit with sudden rolling reserve.
“PayPal love holding my money like say it's theirs”
3,237 likes.
What Merchants Like About PayPal
PayPal works for a lot of merchants. These are real, positive voices — because a page that only shows complaints isn't honest.
“I never had a problem with Paypal and I been using it since about 2004-2005ish for small ebay resales, online shop sales and now my web development business invoice and payment processing since 2018… Maybe I'm an outlier, but I actually like it for now.”
“It easy to use and also it connected with many bank to handle for its services.”
“i love paypal sends. i know a lot of dommes don't like to use it but i've had a business account for years and never ran into an issue. i love the instant transfers and low fees”
6 likes · 818 views.
“For artists, here's some basic knowledge you should have about PayPal… Fearmongering with PayPal is a bit much, if you use it the right way there shouldn't be any problems!”
1,918 likes · 109,325 views. Still advises: "don't use PayPal as a bank."
Why PayPal’s Model Creates These Problems
PayPal started as a peer-to-peer money transfer app. When it expanded to merchant payments, it kept the same aggregated account model: your money flows through PayPal’s accounts, not yours. Combined with post-hoc automated underwriting, you get approved instantly but the risk review happens after your money is already in their system.
“Stripe and PayPal process you under their own shared merchant account and auto-decline entire verticals rather than reviewing the actual business… what you want is a processor that boards you under your own dedicated merchant account with proper underwriting.”
The buyer protection that makes PayPal trusted for consumers is the same system that makes it risky for sellers. When a buyer opens a dispute, PayPal’s default is to side with the buyer — even when the seller provides tracking and delivery confirmation. Every transaction carries chargeback risk that the platform resolves in the buyer’s favor.
“Using Paypal is fine as long as you understand how to mitigate the problems… Have something else available for CC payments. Don’t wait for issues to happen to look for a CC processor. Don’t link your Paypal account to a CC or bank account where you keep your funds… Transfer money from PP to your bank account… atleast weekly.”
Traditional processors do underwriting before you start processing. That takes longer, but once you’re approved, you have a dedicated merchant account with agreed reserve terms and clear chargeback thresholds. PayPal’s pitch is instant access. The flip side is that an algorithm can freeze your account whenever it wants.
What Your PayPal Bill Actually Looks Like
PayPal’s published rate is 3.49% + $0.49 per online transaction. International payments add cross-border fees and a currency conversion margin that’s hidden in the exchange rate.
| Fee | Rate | Monthly |
|---|---|---|
| Online card processing | 3.49% + $0.49/txn | $447 |
| International (20% of vol.) | +1.5% cross-border | $30 |
| Currency conversion | ~3.5% margin | $70 |
| Chargebacks (2 disputes) | $20/dispute | $40 |
| Total | Effective: ~5.87% | $587/mo |
When PayPal Is the Right Choice
PayPal is the right choice for a lot of businesses. These are the cases where it pulls ahead.
Global buyer trust
PayPal is the most recognized checkout button in e-commerce. For consumer-facing stores, offering PayPal increases checkout conversion because buyers trust it with their payment details.
International reach
PayPal operates in 200+ markets and supports 25+ currencies. If you sell to buyers in multiple countries and need a payment method they already use, PayPal has unmatched global coverage.
Buyer protection
PayPal's buyer protection is industry-leading. For marketplaces and consumer-facing platforms where buyer confidence drives sales, this matters more than the processing rate.
Instant sign-up
PayPal lets you start accepting payments within minutes. For micro-merchants, side projects, and marketplace sellers who need to get paid fast, the speed of onboarding is unmatched.
PayPal Compared With Leading Competitors
How PayPal compares with Easy, a payment processor where everything is included in one flat rate and merchants keep control of their own funds.
PayPal pricing from paypal.com/us/business/pricing · Competitor pricing from itseasy.co/pricing
Your money, your rules
Easy is the payment processor for US merchants that want to be back in control. Merchants get a flat rate: 2.7% + $0.30 per transaction, all in. Subscriptions, invoicing, fraud screening, chargebacks, all included.
You didn’t build your business to let a processor sit on your cash. PayPal routes your revenue through their corporate accounts, and they decide when you get it back. Merchants report 21-day holds, 180-day freezes, and account limitations with no explanation or path to resolution.
Easy is self-custodial. Your money stays in your account from the first transaction. Approval takes a few hours, not seconds, because we’re setting up an account that’s actually yours.
And here’s what custody gets you: the same yield-bearing structure the biggest banks use for their own cash. You earn 100% of the rewards your idle revenue generates. Not us. You.
2.7% + $0.30
One rate, everything included
Same Day
Merchant account approval
3.70% APY*
Cashback rewards on idle balances
$0 / mo
No monthly fees, no contracts
*Cashback rewards based on short-term US Treasury rates, as well as other government-backed money market instruments. For up-to-date rates, visit the US Treasury.
Subscriptions, invoicing, fraud screening, chargebacks, analytics, and next-day payouts. All at the same 2.7% + $0.30 rate.
Try Easy →Where Easy Is Superior to PayPal
Real control over your funds and support from the people who built the product. For merchants who care about where their money sits and who picks up the phone, Easy is the stronger choice.
You keep your money
Easy is self-custodial. Your revenue goes to bank accounts you own from the first transaction. There are no reserves or holds, and you never wait for a processor to release funds they collected on your behalf.
One rate, everything included
2.7% + $0.30 per transaction. Subscriptions, invoicing, fraud screening, chargebacks, analytics, next-day payouts. Other processors quote a base rate, then charge extra for each of these separately.
Talk to a human who built it
Phone, email, and chat support from technical founders. When something goes wrong with your payments, you talk to the people who wrote the code.
Your idle cash earns for you
Easy's custodial structure means your idle revenue sits in yield-bearing instruments backed by US Treasuries. You keep 100% of the rewards. Most processors earn interest on your float and never pass it along.
Where Easy Falls Short
Easy is a good fit for a lot of merchants, but there are gaps.
US only
Easy only supports US-based merchants right now. If you operate outside the United States, PayPal (200+ markets) or Stripe (135+ currencies) are better options.
Newer platform
PayPal has decades of third-party integrations and plugins. Easy's ecosystem is smaller. If you depend on a specific integration, check that it works with Easy before switching.
No buy-now-pay-later
PayPal offers Pay in 4 and Pay Monthly at checkout, which can lift conversion on higher-ticket purchases. Easy doesn't have a built-in BNPL option yet.
Client types limited
Easy currently doesn't work with some merchant types like coffee shops and restaurants. These businesses are better served by Square or Toast.
Alternatives Worth Considering
If Easy doesn’t fit, these processors are worth a look.
Stripe
Developer-firstThe most extensive payment API and integration library available. If your team builds custom checkout flows, needs marketplace infrastructure via Stripe Connect, or operates in 135+ currencies, Stripe is the industry standard.
Helcim
Volume discountsInterchange-plus pricing that drops automatically as your volume grows. No monthly fees. If you're in Canada or the US and want to see exactly what you're paying per transaction, Helcim is the most transparent option.
Square
In-person retailIn-person payments first, everything else second. Hardware, inventory, employee scheduling, all in one system. If most of your sales happen at a counter or a table, Square was designed for that.
Adyen
EnterpriseHandles 250+ payment methods across 100+ countries. Built for large businesses that need online, in-store, and mobile payments under one roof. You'll need enterprise-scale volume to make the pricing work.
Frequently Asked Questions
If you sell internationally or need buyer trust at checkout, PayPal earns its keep. The brand recognition genuinely lifts conversion. The tradeoff is cost: 3.49% + $0.49 per transaction versus 2.7% + $0.30 on Easy. And there's the account freeze risk. PayPal can lock your funds for up to 180 days with barely any explanation. US merchants processing mostly domestic card payments will almost certainly find a better deal elsewhere.