Is that how a bank would act? Yes, that's exactly how they act. When you get a chargeback, they remove the funds (and a chargeback fee) directly from your bank account. That's the only place they could come from, since you don't hold a balance like you do at PayPal. Settled payments get deposited into the account, refunds and chargebacks and fees get withdrawn, once a day 5 days a week.

As for restricting venue, yes, that's also something banks would do. It's a standard term in most contracts, let alone most merchant service agreements. Here's the agreement for First Data, one of the world's largest merchant account providers. It's also the same agreement you sign for Intuit Merchant Services. You've probably heard of Intuit; QuickBooks, Quicken, TurboTax, Mint, etc. It restricts venue to Ontario.

http://www.firstdata.com/downloads/international/fdims-1202....

PayPal does not have the ability or authority to steal people's money "for any reason and in any quantity". That's ridiculous. You're spreading lies while admitting not to know how it works anywhere else. We don't do that here on HN.

> Is that how a bank would act? Yes, that's exactly how they act. When you get a chargeback

I wasn't talking about chargebacks.

> PayPal does not have the ability or authority to steal people's money

They have the ability and they couldn't care less about having the authority to do so. Largely, because the majority of their customers can't pursue them in court. They also limit any arbitration to 10K. If you read the user agreement, it's all right there, in black and white.

> You're spreading lies while admitting not to know how it works anywhere else.

I sincerely hope you keep a balance with them. So that you can find out from experience, as I did.

I do keep a balance with them. I have for the past 12 years.

http://i.imgur.com/FWgxP.png

You've obviously had a bad experience with them. That sucks, really. And I won't tell you not to hold a grudge against them for whatever that was. It helps no one to use that as an excuse to claim they haven't innovated as a company in 10 years, that they have unlimited rights to steal, that their contract isn't essentially identical to other merchant services agreements, and then to wish ill on me personally for pointing that out.

Like I said, you'll find out. I heard the same stories and dismissed them. I kept a balance with them in the 6 figures because of the relatively high interest rate I was getting in the money market account (when they had it). Then they froze my account. No biggie, right? I'll just wait 6 months. Still getting the high interest rate. Before they unfroze the account, they took a chunk out of it. Only about 10%, but it was still quite a bit of cash. No explanations, just email stating the obvious. My recourse? Nothing. They refuse to speak to you, only by letter. Letter gets a response 6 months after the fact and it's just a form letter pretty much acknowledging receipt. Like I said, you'll find out. If you do business with a local bank, at least you can take them to court if there's a problem. With PayPal? Good luck.