At first we couldn’t believe those rumors until we actually suffered from it, what a horrible experience.
Search keywords “lawsuit against Paypal for holding funds” at google, twitter etc., we learnt more about how Paypal has been using the same trick to hold users funds randomly, probably investing the funds on something else (180 days interest free loan) to rise income.
For public interest and the sake of online sellers, we’d suggest store owners avoid using Paypal due to their low transparency, hence a dishonest bank-like scammer like Paypal should be banned by the Monetary Authority.
We wonder how many Shopify store owners have the same experience, share with us.
Thank you for sharing your experience here with other merchants to understand. I wanted to share some insight into payout holds and how they work for both yourself and anyone else concerned about this happening with your online store.
All online payment gateways have the ability to place a hold on your payouts at any time. The payout hold is put in place when the banking partners that power the gateway feel that a business has a high level of risk, a low trust rating, a history of chargeback claims from customers, or other similar reasons. A payout hold could be for a partial amount or the full amount of orders over a period of time.
After the appropriate time has passed, the payout hold is released and any funds that were not deducted to cover chargebacks or bank claims will be deposited.
This policy will be included in the terms of service for your payment gateway, and each one is different. I definitely recommend reviewing your gateways TOS to learn more about how yours approaches this topic.