>Seriously, how did PayPal end up like this?

It ended up like these partly because of being the only really international online payment service -- thus having to abide and keep tabs on hundreds of different legislations and rules.

How do you tell a guy making $10,000 in 7 days from a small scale money laundering attempt?

How do you know he is not selling BS and that in a week or so you wont have a backslash of people demanding their money back from you (the payment service)?

I'm no fan of PayPal, but this customer was aware that a sudden onslaught of sales (where before there was none) might set off some sort of alarm with his payment processor. Seems like a legitimate concern for both the processor and a pro-active measure by the customer.

We all know the horror stories of frozen PayPal accounts but I can't say I can blame PP given the scope of what they have to deal with when transferring money and dealing with regulators/government.

Informing them in this instance does seem more like the situation where you tell your bank your traveling overseas between X and Y.

It's reasonable to assume a flood of cash would be enough to set off various alarms.

It is a shame you have to be so wary of PayPal, but in this case it did lead them to do what would be the right thing no matter what you were using to cover payment processing.

Calling them it's not a big deal, but they could make it clear. If you email their support you'll get these long and vague emails. I've learned my lesson: if I need anything from PayPal I'll call them presto. Once I was accessing PayPal while using a VPN (I was on a public wifi) and they blocked my account. I called them and the matter was solved very efficiently in seconds. But, how on earth would I know that my account would be blocked if I used a VPN?

I don't think anyone would say the way PayPal handles things is the right way, including the clarity of their communications. I just saw the story highlighting that you probably should have a better relationship with your financial institutions in general.

In this case the fear of dealing with PayPal lead the author of the link to do what would have been the right thing no matter who they were dealing with.

I don't know how well regulated Paypal is, as you infer, since it is not a bank and does not have to follow bank rules.

Banks and credit card companies seem to get it right with many more regulations, why can't Paypal? If I use my credit card for a spending spree, all it takes is one phone call with Visa to have everything cleared up. Paypal wouldn't have earned their reputation if they were able to provide that level of service.

https://www.paypal.com/uk/webapps/mpp/about PayPal (Europe) S.à r.l. et Cie, S.C.A. is duly licenced as a Luxembourg credit institution

Of course what you say is true.

Let me put it another way: when my CC issuer detects an anomaly, they block the charge and contact me rightaway to resolve it. I don't fear anything because I know they'll do the right thing and keep me in the loop. Why can't PayPal have such a symbiotic relationship with their customers, rather than instilling fear?

Congrats, Pedro! I met him at MicroConf Europe - very nice guy, so it's good to see this.

> Seriously, how did PayPal end up like this?

By having lots of people out to rip them off.

MicroConf Europe was a lot of fun. I learned a lot and I met a lot of nice people, like you.

Good question. I guess the only reason I didn't ditch PayPal before was that in the past Gumroad would deposit your money in your PayPal account (i.e. you'd need PayPal anyway). Now that Gumroad deposits directly to your bank account, I'm looking forward to move to a Gumroad-only solution,

I was wondering about that. Why would you switch to Gumroad if most of your buyers seem to want to use PayPal?

Good point. Also, someone reminded me that many people may not have a credit card, so I guess I'll keep both.

To be fair, if you were going to suddenly deposit a ton of money to your bank, or make a ton more money this year than last, you might call up your bank or accountant beforehand. It's perfectly reasonable.

Why would I?

In order to inform them of the fact that an unusual rise in activity and balance is expected and to give legitimacy to it by explaining a reason. This can help prevent some of the automated (or non-automated) fraud detection that can go into place in such situations, ensuring you have access to the contents of that account as quickly as possible.