<p>As PayPal is not a bank and reserves the right to freeze your account for whatever reason they deem fits them, you should never use PayPal, unless you can afford to lose your money, or are prepared to take them to court and win, should they steal your funds.</p>

<p>While this is not specific to BitCoin per so, it is probably likelier to happen with edge cases that PayPal for some reason might be likelier to see as a threat to their interests or business model than the everyday type of transactions that make up the bulk of their volume of business.</p>

CC BY-SA 3.0
2012-11-24T09:21:31.223Z
2012-11-24T09:21:31.223Z
ecmanaut
<p>You should NEVER use Pay Pal. As other readers  have noted, they do what the danged well want to do.</p>

<p>And if they make a mistake, which happens regularly, they will NEVER admit their mistake and give you your money back. Plain pure and simple! I know. </p>

<p>So using Pay Pal is an invite to lose your money. It has happened to 100's of thousands including me.</p>

<p>I am actively seeking an acceptable alternative to pay pal, but so far, no go.</p>

<p>Any suggertions.</p>

CC BY-SA 3.0
2012-11-24T23:46:19.423Z
2012-11-24T23:46:19.423Z
David
<p>PayPal it is a Bank, it became a Luxembourg Bank in 2007 (
<a href="http://tamebay.com/2007/05/paypal-becomes-a-bank-no-longer-under-fsa.html" rel="nofollow">http://tamebay.com/2007/05/paypal-becomes-a-bank-no-longer-under-fsa.html</a> )</p>

CC BY-SA 3.0
2012-11-28T04:09:06.760Z
Can you substantiate that beyond the blog post? The page on PayPal's site to which it links is no longer there.
Colin Dean
CC BY-SA 3.0
2012-11-28T02:08:02.773Z
2012-11-28T02:08:02.773Z
Sebastian Castro
<p>First of all, it is likely a violation of PayPal's <a href="https://cms.paypal.com/us/cgi-bin/?cmd=_render-content&amp;content_ID=ua/AcceptableUse_popup">Acceptable Use Policy</a> as of Oct 2011:</p>

<blockquote>
  <p>3(h) involve currency exchanges or check cashing businesses</p>
</blockquote>

<p>Given this, it's unlikely that PayPal would be amenable to helping at best, and may close your account (and freeze the funds it had for six months) at worst.</p>

<p>Another chief problem is the high likelihood of chargebacks. PayPal has generally sided with the buyer when any dispute is brought against the seller for any reason. For this reason alone, it's best to accept Bitcoin only when you trust the buyer and have some influence on their reputation.</p>

<p>Furthermore, Paypal has high fees (<a href="https://www.paypal.com/webapps/mpp/merchant-fees">current 2.9% + $0.30 USD</a>).</p>

CC BY-SA 3.0
2012-11-24T20:19:40.713Z
If the transaction wasn't with a business, but instead was with an individual, does that make it acceptable with the given wording?
Highly Irregular
CC BY-SA 3.0
2012-11-27T23:56:16.403Z
Given the wording, it may not apply. Given PayPal's practice, it apparently does.
Colin Dean
CC BY-SA 3.0
2013-06-10T21:02:40.703Z
PayPal clarified this in an internal email from 2013 June 10: http://www.reddit.com/r/Bitcoin/comments/1g23w2/paypal_email_to_employees_policy_regarding_bitcoin/
Colin Dean
CC BY-SA 3.0
2017-01-13T19:19:55.400Z
Because the original post has been deleted: http://web.archive.org/web/20130613134557/http://www.reddit.com/r/Bitcoin/comments/1g23w2/paypal_email_to_employees_policy_regarding_bitcoin
UTF-8
CC BY-SA 3.0
2012-11-24T03:11:33.633Z
2012-11-24T17:44:10.170Z
2012-11-24T17:44:10.170Z
Colin Dean
<p>I've heard that it's not a good idea to accept PayPal payments in exchange for Bitcoin. Why?</p>

<trading><payment><paypal>
Why shouldn't I accept PayPal when trading bitcoin?
Colin Dean
# Why shouldn't I accept PayPal when trading bitcoin?

(Asked by: username_0 on 2012-11-24)

I've heard that it's not a good idea to accept PayPal payments in exchange for Bitcoin. Why?

**Tags:** trading, payment, paypal


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## 4 answers

### Answer by username_0 on 2012-11-24. Score: 12 | Accepted answer

First of all, it is likely a violation of PayPal's [Acceptable Use Policy](https://cms.paypal.com/us/cgi-bin/?cmd=_render-content&content_ID=ua/AcceptableUse_popup) as of Oct 2011:

> 3(h) involve currency exchanges or check cashing businesses

Given this, it's unlikely that PayPal would be amenable to helping at best, and may close your account (and freeze the funds it had for six months) at worst.

Another chief problem is the high likelihood of chargebacks. PayPal has generally sided with the buyer when any dispute is brought against the seller for any reason. For this reason alone, it's best to accept Bitcoin only when you trust the buyer and have some influence on their reputation.

Furthermore, Paypal has high fees ([current 2.9% + $0.30 USD](https://www.paypal.com/webapps/mpp/merchant-fees)).

> **Comments:**
> **username_4**: If the transaction wasn't with a business, but instead was with an individual, does that make it acceptable with the given wording?  
> **username_0**: Given the wording, it may not apply. Given PayPal's practice, it apparently does.  
> **username_0**: PayPal clarified this in an internal email from 2013 June 10: http://www.reddit.com/r/Bitcoin/comments/1g23w2/paypal_email_to_employees_policy_regarding_bitcoin/  
> **username_5**: Because the original post has been deleted: http://web.archive.org/web/20130613134557/http://www.reddit.com/r/Bitcoin/comments/1g23w2/paypal_email_to_employees_policy_regarding_bitcoin  

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### Answer by username_1 on 2012-11-24. Score: 4

As PayPal is not a bank and reserves the right to freeze your account for whatever reason they deem fits them, you should never use PayPal, unless you can afford to lose your money, or are prepared to take them to court and win, should they steal your funds.

While this is not specific to BitCoin per so, it is probably likelier to happen with edge cases that PayPal for some reason might be likelier to see as a threat to their interests or business model than the everyday type of transactions that make up the bulk of their volume of business.


---

### Answer by username_2 on 2012-11-24. Score: 1

You should NEVER use Pay Pal. As other readers have noted, they do what the danged well want to do.

And if they make a mistake, which happens regularly, they will NEVER admit their mistake and give you your money back. Plain pure and simple! I know.

So using Pay Pal is an invite to lose your money. It has happened to 100's of thousands including me.

I am actively seeking an acceptable alternative to pay pal, but so far, no go.

Any suggertions.


---

### Answer by username_3 on 2012-11-28. Score: 0

PayPal it is a Bank, it became a Luxembourg Bank in 2007 (
<http://tamebay.com/2007/05/paypal-becomes-a-bank-no-longer-under-fsa.html> )

> **Comments:**
> **username_0**: Can you substantiate that beyond the blog post? The page on PayPal's site to which it links is no longer there.  

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