A question about paypal.

URGENT PayPal question. Please help?

• Well, I been using PayPal since 2008 and never had problems. Since, Nov of 2011 I created my own website and started to sell on my website too. I am doing drop shipping means I send my orders to the main company and they will ship it to my buyers directly. Since Nov of 2011 my sales increased to monthly sales transaction of around $30K. I am a verified user and PayPal has already my SSN number and my credit card is linked as well. Now, last week, they sent me an email that they want prove of ID and invoices and info about my business and tracking numbers of FedEx. I do have all of these and will send them. I am only 22 yo and doing my own business and during past 3 months out of $100k I just had only one credit card charge back and I agreed to give buyers money back. So I didn't have much complains and charge backs. Now, PayPal did not yet froze my money. I know most of the times they just froze your money and hold for 180 days. But in my case they are letting my to withdraw my money but If I don't send the requested doc such as ID and proofs they will froze the account. FYI. I did apply for PayPal merchant rate last month and my application was approved to lower the PayPal rates. As I said, I am writing letters about my business and will send them these tracking numbers and everything they want. Do you think they will let the account to be open? or they usually don't care what you send them. I am guessing they don't want to lose profit with such as high and good seller account. Any advise? I was thinking its fair when someone has such as high amount of money coming and going out of PayPal account, PayPal would require more info about this business. Let me know what do you think and any advise you can share. I just need as much as info. Thank you.

• Answer:

  There are a couple of reasons that they want this information in my experience. The first is that they want to validate that you don't have any shill transactions to hit your current volume prior to lowering your rates to the next pricing tier. The second is that they are under new regulations from the IRS for reporting and compliance. Since you have an SSN on file versus an EIN for the business, they need to validate the business in order to meet their IRS obligations. They do want your business but they need to be compliant. This isn't something to get upset about at this point.