My average ticket is around $40 and my volume is in the tens of thousands per month range. Many small tickets, in other words, rather than few big ones. I sell virtual goods and services, nothing tangible. Over the course of the ten years, there have been over 100 held payments, reversals, and chargebacks. PayPal has won a significant number of those chargebacks and recovered the funds for me.

The situation you described of having an account closed due to fraud problems, funds held for 180 days, and no help during that time is the same experience they'd have with a merchant account anywhere else. The policies are exactly the same, because they trickle down from the card associations themselves -- more than 1% chargeback rate, or a categorization as a high risk business due to what's being sold, and the MAP is bound to close the account and hold payments for 6 months or their own ability to process credit cards becomes at risk with Visa and MasterCard.

I've actually gone through that with a normal merchant account underwritten by a bank. My experience with PayPal has been much more pleasant, though I expect they would do no less if for some reason they classified me as high risk. They have the same obligations to Visa/MasterCard as anyone else doing payment processing does.