Getting Shut Down by Paypal, Venmo, and Square

Here are my Paypal, Venmo, and Square Cash shut down stories.

Paypal (x 3)

My first two Paypal accounts (personal and business) were shut down due to a few factors: lots of high-volume transactions, Paypal MyCash cards, postal money order purchases with the PPBDC, etc. You get the picture.

I tried calling in to get it reinstated, but it was like talking to a brick wall. “We recommend you take your business elsewhere.”

Since then, I opened a new Paypal account, and life went on better than expected. 

Almost two years later, a friend sent me some money with the ghastly letters “GC” used to describe the payment. That triggered a freeze on the payment (around $2k). They wanted me to wait six months for the funds. I CFPBed them and they unfroze the funds, but shut down the account.

On to the next Paypal account.

[Read: The Various Levels of Paypal Accounts]

Venmo

It took me a while to get used to Venmo’s social-based platform, but after a few short months I loved it. I used to marvel how Paypal always make problems, yet Paypal-owned Venmo worked smoothly and quickly.

They have clear limits of $3k/week ($300/wk without verification), and everything went smoothly and easily. Presumably, I just have to stay within their stated limits and all will go well, right?

Until…I was shut down.

I mildly tried getting them to reinstate the account, but they resisted, recommending that I get a Paypal business account instead. If only they knew…

Square

So this one was interesting, and luckily it has a happy ending.

I initially opened a Square Cash account to send money to a friend. Remember, my Venmo and Paypal were gone, leaving me with Square to send money to friends. Square has similar limits to Venmo, though I used it very casually for a few friendly transactions.

A few months later, Square Cash began offering a $10 bonus when signing up using a referral link. Our beloved leader Will posted about that deal, and generously included my signup link in the post. (I’ve gotten quite a few referral bonuses from that, thanks to all who used it!)

Soon after the DoC post went live and a few referral bonuses rolled in, I found my Square Cash account frozen. I knew right away that it had to do with the influx of referrals, but I completely mistook the underlying concern.

My assumption was that Square presumed the referrals fraudulent; perhaps I created a bot that opened Square accounts to game the referral system, or something of that sort. I contacted Square to clarify that all the referrals are legit and coming from the blogpost.

Interestingly, my email could have done more harm than good because they explained that the reason they froze my account was that they don’t allow accounts which are in existence solely for the sake of generating referrals.

In any case, my Square account had in fact been opened for the purpose of sending money between friends. It was around for a few months before any referral action, and from the account activity it was also clear that I’d been using it to send money to friends, something I continue to do now.

After a couple emails exchanged, they unfroze my account. I think I lost out on a few referral bonuses during the time the account was frozen, but now the account is back to normal for sending money and referral bonuses.

Wrap Up

So there you have have my electronic wallet war stories. On Sunday we’ll do a follow-up post entitled: How to Send Large Payments without Getting Shut Down.