We have been in BitCoin sale business for more than a 1.5 years and started offering people to purchase Bitcoin paying with PayPal on localbitcoins and paxful as well as our own website Paybis.com
There was a learning curve, to find a safe process and avoid chargebacks, but the story is about different topic.
First we started with European Business PayPal account, after 6-7 month it got shutdown with comment that BitCoins are not regulated in EU thus it's too high risk.
At same time we learned that there are people and companies in USA selling BitCoins for PayPal without any problems. So we did same, opened a company, opened PayPal business account, 6-7 month same story, account closed with comments that it's too high Risk.
The important thing is that we were 100% open to PayPal in what we do, during reviews, phone calls and all disputes. We even won around 50% of all disputes. As result having less then 1% in chargebacks in total.
PayPal never commented or answered any emails addressed to compliance team, where we explained our business model, verification processes, etc.
The market is still there, it's still growing, some traders like us disappear, new ones are getting into the game thinking it's such a great place. But in reality, 90% of people who we know that sell BitCoin for paypal get their accounts shut down. As result, they have to start using new accounts pretending the sell something different, thus PayPal allows them to operate without knowing what they really do.
Is that smart? is PayPal shooting it self in the leg, rejecting honest and transparent sellers? Or maybe it's easier for them to report that there are no high risks merchants and close eyes for under cover operations as long as there are not too many disputes.
I've found a guy who works in PayPal compliance over the web, we agreed that i'll not disclose his name, but i'll put here some of his statements:
- PP usa is regulated as payment trasfer business. I think requires separate licence in each state. Controls are tough but not too tough.
- PP EU is regulated as bank and same as for bitstamp licence probably took years to acquire. PP will not risk loosing licence for 0.5% of extra revenue (risk apetite).
- Usa pushed some good clarifications around and regulatory frameworks giving entities in crypto business operating parameters. EU remain very conservative and regulatory vacum is a problem. Well established entities will not risk relationships with regulators in those unclear conditions.
So these statements explain the reason why PayPal Europe might not want to deal with us, but still does not explain why PayPal USA turned away.
What's your experience with PayPal? Despite that we all know that PayPal is EVIL
Do you think they will changed their policies in EU after new FATF guidelines will be released? Do you have ideas how this could work with PayPal USA?
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