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How To Stay In PayPal’s Good Graces

I heard from another Internet Marketer, who shall remain nameless since I didn’t get his permission to tell his story, that PayPal finally released more than twenty grand of his money after a sixty day hold.

You see, there are liabilities that PayPal has to lookout for to protect themselves that most people don’t know about.  We as entrepreneurs might not like them but we definitely need to know that they are there and understand them.

Here are a few of the do’s and don’ts when it comes to using PayPal as your payment processor.

1. Never take all of the money out of your PayPal account.

The reason: When you withdraw all of the money out of your PayPal account they can’t recoup the money if someone does a chargeback with their credit card company, which they can do for up to six whole months.

2. Soon as you begin making money online, form a business entity.

The reason: With a legal business entity like a corporation or LLC you are far less likely to be fraudulent in the eyes of PayPal.  This is because you must file a legal tax identification number with the government, which is called an EIN (Employer Identification Number).  People with just a personal premier account doing business under a Social Security Number don’t look as secure and professional to them the way that a real business does.  They could be on the hook for a lot of money if you up and disappear.

3. Be sure to have a professional looking business website to show them with all of the proper disclaimers in place.

The reason: PayPal needs to see that you are a real business and not some scammer with a one page sales letter with the goal of collecting money.  The site needs to look very corporate (AKA – boring) and business to business.  They don’t like the Internet Marketing niche because it has been deemed as high risk due to all of the scammers out there.  You need this site before you ever start making any worth while sales.

That’s it!  You should now be armed with some information that will help you navigate the waters that will help you stay in the good graces with PayPal.

Like anything, you should always have a backup merchant account for your products and services.  If for some reason PayPal shuts you down, you can quickly shift to your other merchant account without damaging your businesses ability to accept payments and make money.

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Monday, September 5th, 2011 Internet Marketing Comments Off
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