My company has been going for 2.5 years and we've used paypal without any issue for event registration payment processing for around a year. An automated email recently indicated that all of a sudden Paypal required us to have a minimum of $250k on reserve with them - and PayPal are withholding £28k in sales as the first part of this. I assume (although I don't know, because there's been no real discussion with an account manager) that this is because they've seen a "spike" in sales - we had a US event so they would have seen a load of bookings come through in one month. But it is not clear why we are considered suddenly to be a risk since nothing has changed in our business model.
Bluntly, I am left with the assumption that this is simply a way for their CFO and Treasurer to boost cash pooling/cash on hand by reserving cash funds needed by hundreds/thousands of small business - it certainly bears no relation to my business's performance.
Has anyone else experienced this? it is entirely unworkable for us - $250k would represent a major proportion of our income and it simply is not possible to have Paypal hold this kind of money when we need our sales revenue to pay salaries, suppliers etc etc.
I am both angry and totally baffled. The way it has been handled is appalling - all automated messages, no human intervention and it is without logic. Can anyone share how they have tackled this?
Has anyone managed to have a rational conversation about a similar
