PayPal is one of the most popular payment processors out there. It’s a great way to accept payments and get money into your bank account, but now that the company has changed its user agreement, it’s no longer safe to use PayPal.

If you’re paying with PayPal and haven’t read this new policy update yet, what I’m about to say will probably shock you: if you use PayPal and something goes wrong with your transaction or customer service issue, there’s a chance they can fine you $2500 — even if they were at fault!

The new user agreement also gives them power over freezes or bans on your accounts without any real recourse for appealing their decision.

Policy updates happen often, usually going ignored. But not this time.

You’re not alone in thinking that it’s different this time. PayPal policy updates happen pretty frequently, and they usually go completely unnoticed. But the new changes are so drastic that they caught the attention of some big names in tech (no, not Elon Musk). There’re even people who say that if the new PayPal user agreement continues to change, they may stop using PayPal altogether—and millions of other people will follow suit too.

Can you blame them? We get emails about policy changes to terms and services all the time—almost daily. No one every clicks in and reads what that means. We’re willing to bet PayPal thought this would be another situation like that, but they thought wrong.

So what exactly is going on here? What does it mean for you? And more importantly: why should you care about something as seemingly trivial as a change in your online payment system’s terms and conditions?

Account holders are warned, this is big.

New PayPal Policy: they can fine you $2500 at will.

So when you use PayPal, they have the right to fine you $2500 if they feel like it. They can do this for any reason and they can do it with no reason at all. It’s a new policy, and it’s not because of anything that has happened in particular with the payment company.

It largely stems from the political atmosphere. PayPal is protecting itself. Think of all the backlash Facebook got for displaying misleading ads. You know who else gets in trouble when that happens? The payment processor behind the ad.

PayPal is saving itself by essentially saying, “if you do something we don’t like, you’ll pay for it.”

The new policy does refer to the spread of misinformation, and we do understand that concern. If a company using your service doesn’t align morally with you, then you want to distance yourself from them. That’s what PayPal is doing, just in the form of a monetary payment when they feel like.

They can also freeze or ban your PayPal account (not surprising).

While it’s true that PayPal has always had terms of service, the new policy imposes harsher penalties for violations. If you violate the new rules, your PayPal account is subject to a $2,500 fine. And if you’re banned from PayPal? You won’t be able to access your funds at all — nothing.

The idea of being unable to transfer money out of an account is absurd and terrifying; it’s also something that could happen under this new policy.

If you have any concerns about using U.S. PayPal as an alternative method of payment or transferring money between friends or family members, then we strongly recommend you explore other options before doing so.

Banning accounts isn’t new for PayPal. The company has a long history of banning users for various reasons, and it’s not uncommon to see people reporting their business accounts have been banned without warning or explanation. PayPal is making it easier for them to justify their actions. The only side benefiting from this new policy is PayPal, not you.

PayPal makes their own rules.

PayPal is a private company, so they can make up their own rules. They can change them at any time and you have no recourse to take action against them.

You cannot sue PayPal for anything that happens to your account or business with them. You are at their mercy, meaning if they decide one day that what you are doing is wrong or bad for their image, they will freeze your account and keep all of your funds without giving any explanation as to why or how it happened.

We wouldn’t be surprised to see PayPal regress to a “friends and family” service and only offer personal accounts. There’s just no way small businesses can benefit from their functionality anymore.

This affects many merchants in nutraceuticals and coaching.

To quote from their new policy: content that “promotes misinformation” and “presents a risk to user safety or wellbeing.

That’s a direct jab at supplement merchants and those selling information. PayPal already disliked merchants in these categories (and many others). They would ban those accounts after a few months of processing. But that was the only penalty: getting funds frozen and the account banned. You never had to pay them a fine.

Until now.

Imagine this: you’re weight loss shop is doing great and picking up steam, then you wake up one morning to see no sales have been made for 12 hours. Why? Because PayPal blocked your account—there’s no possible way for customers to make a purchase. Not because a chargeback came through, but because PayPal decided your store misinforms people.

How do you think this affects free speech? Why should it be part of the acceptable use policy that a merchant be censored for describing their product? Censoring at its finest.

If you use PayPal as your main payment processor, STOP NOW!

If you are a business owner, please use a different payment processor. Stop using PayPal. The fact that this company has been allowed to go unchecked for so long is insane, and we cannot sit back while they continue to hold our money hostage and fine us for their mistakes.

PayPal won’t support your business, they won’t protect you, and they’ll continue to take your money until your bank account is drained. This new policy is just a stepping stone—expect more to come.

There’s no such thing as seller protection to PayPal, just another way take even from the e-commerce merchants that are dedicated to them.

Instead, you need a real merchant account with real card payment processing power from a provider that effectively supports your business. Not Stripe, not Venmo. A real account.

Online merchants need a way to accept credit cards, debit cards, and other payment methods for their goods and services. PayPal simplified that, building trust along with convenience. But this is the end for PayPal. The first hint that something was off was when eBay, their previous parent company, separated.

PayPal already has a terrible fee structure, with high merchant fees, high transaction fees, and a flat-rate system for US business accounts.

PayPal’s new user agreement is a disaster, and you should avoid their service like the plague.

In a nutshell, PayPal has made their own rules. If you don’t agree with them, they will fine you $2500 and freeze or ban your account. Does that sound like a safety net for your business, or diving straight into shark-infested waters?

Get a payment processor designed for your business model. Whether you’re selling supplements, advice, life coaching, guns—there’s a merchant account out there that supports you. We can help connect you with it and the payment processor that will facilitate your transactions, no risk of bans or freezes.

Stay safe, leave PayPal, and get an account that works without the threats. DirectPayNet is here to make that happen for you. Get in touch now.