When PayPal Drops Your High Risk Merchant Account

Aug 23, 2023 | Payments

Where To Turn When You Lose Your PayPal Merchant Account

When an aggregate high risk merchant account, like PayPal, kicks you off its platform or freezes your account, it can be confusing as to what to do next. Signature Payments is here to answer all of your questions. We take the guesswork out of what your next steps should be when applying for a high risk merchant account after losing your PayPal merchant account.

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What is a Dedicated High Risk Merchant Account?

A dedicated high risk merchant account, like one you might have acquired with Signature Payments, is an account where the business has its merchant ID. The merchant is not sharing a high risk merchant account with several other businesses. This is different than an aggregate high risk merchant account like PayPal. These aggregate companies use one merchant account for an entire portfolio of merchants.

A business has far less control with an aggregate high risk merchant account with PayPal than with a dedicated high risk merchant account. With dedicated high risk merchant accounts, transactions between the merchant and the customer are deposited directly into the business bank account.

With an aggregate high risk merchant account, the funds from a transaction are sent to the account provider and then are deposited into the merchant’s bank account. PayPal, the aggregate high risk merchant account provider, also makes its own rules and can make any changes they deem necessary without your consent.

After Your High Risk Merchant Account Is Dropped From PayPal

Chances are, if you were dropped from one of the significant aggregate high risk merchant account providers, like PayPal, it is only a matter of time before you are dropped from the others.

This means that your next step will be to apply for a high risk merchant account with a company that specializes in high risk merchant accounts. This provider can then assign you a specific merchant ID.

After Your High Risk Merchant Account Is Dropped From PayPal

Reasons For Dropped Payment Accounts

There are several reasons why a business gets flagged as high risk. It’s expected that PayPal and other aggregate merchant providers to accept most merchants only to shut their accounts down a few months later.

Here are some of the most common reasons banks and payment processors consider your business as high risk:

Large amount of chargebacks
Higher risk of fraud
Reputational risk
High ticket prices
State and Federal Regulations
Continuity billing

Reasons For Dropped Payment Accounts From PayPal

It is best to seek out a high risk merchant account payment processor with excellent relationships with several banks.

It’s even better when that merchant processor has an in-house underwriting team that will cross every T and dot every I during the application process. They ensure you are presented in the best ways possible before sending your application to a bank.

Unlike PayPal, this kind of a high risk merchant account payment processing company is incredibly difficult to find. That said, here at Signature Payments, we are a high risk payment processing company that meets those exact.