When an aggregate merchant account or credit card processor like PayPal, Square, or Zelle freezes your account, it can be confusing as to what to do next. PayPal is a widely used online payment platform, but sometimes accounts can be frozen, limited, or even permanently locked due to security concerns, policy violations, or unusual activity. If you find yourself unable to access your funds or complete transactions, here’s what you can do to resolve the issue.
1. Identify Why Your PayPal Account Is Frozen
PayPal freezes accounts to protect users and comply with financial regulations. Common reasons include:
- Suspicious activity (such as unusually large transactions)
- Frequent chargebacks
- Sudden spikes in sales
- Violation of PayPal’s policies (selling prohibited items, fraudulent behavior, etc.)
Additionally PayPal enforces strict identity verification rules to prevent money laundering, requiring users to provide proof of identity or business details. If an account receives multiple disputes or refunds, PayPal may freeze it to investigate potential scams or misuse. While frustrating, these measures help maintain security and protect both buyers and sellers.
To check the specific reason, go to the PayPal login page. Enter your email address and password. Then navigate to the "Resolution Center" to see any alerts or requests for information.
2. Follow the Instructions in the Resolution Center
PayPal usually provides steps to unfreeze your account. This may involve:
- Confirming your identity (uploading a photo ID, passport photo, bank statement, or proof of address).
- Verifying recent transactions with vendor invoices and other documents to prove they are legitimate.
- Providing additional business information if you use PayPal for commercial purposes PayPal may ask for supplier invoices and other documentation from your company.
3. Contact PayPal Support
If you don’t see clear instructions or need further help, contact PayPal support:
- By phone – Call PayPal’s customer service (log in and find the number under "Contact Us").
- Via chat – Use the message center for real-time support.
- Through social media – PayPal support is active on Twitter/X (@AskPayPal) and Facebook.
4. Do Not Create a New PayPal Account
Do not create a new PayPal account. If one account is frozen, a new one may also get flagged.Be sure to provide accurate and complete information when responding to PayPal’s requests. Incomplete or false information will likely lead you to getting your account frozen again later on especially if you have a PayPal high risk merchant account. If your business falls outside of PayPal’s regulatory compliance and acceptable use policy you’ll want to consider high risk merchant account providers for your business’s payment and credit card processing.
5. Consider Alternative Payment Methods
If PayPal keeps your account restricted for an extended period of time or has dropped your account altogether, consider other payment processors such as PayKings to continue receiving payments. There have been instances where PayPal freezes an account, interrupting businesses cash flow, and providing little to no information. Customers of PayPal report PayPal preventing them from transfering the money they earned into their bank accounts for up to half of a year. Some individuals report at the end of that six months that PayPal claimed the money in their account so they weren’t able to get it back. This has led to the PayPal merchants incurring additional expenses by needing to hire a lawyer to bring a lawsuit against PayPal to get them to release their funds and resolve their complaints. In connection with these problems, merchants have had frustrations with PayPal’s communication.
Merchants have called the telephone numbers provided by PayPal to get information about their PayPal business account only to have poor experiences with customer support representatives offering them almost no additional knowledge or data about why their account was frozen. Other feedback customers have also reported is not being offered any options for how to unfreeze their PayPal account. PayPal merchant account business owners who are prevented from taking payments can suffer significantly and it can push them to take out loans to keep their business afloat while engaged in a lengthy process to get PayPal to remove the freeze on their account. To avoid this hassle and heartache consider signing up for a merchant account with PayKings. PayKings has a solid reputation in the high risk processing industry and won't shut you down for ridiculous reasons. We will provide you with a competitive rate, top notch customer service, and enable your business to start processing payments and bringing in revenue again.
Industries with high chargebacks, credit card fraud, friendly fraud, and other crimes are considered high-risk merchants. Friendly fraud is when the consumer disputes the charge with credit card issuers such as Mastercard or Visa. These credit card payment scams increase costs for credit card companies and payment processors thus leading certain companies to avoid high risk merchants. If your business falls into the following categories PayPal is unlikely to unfreeze your account and you’ll need to find a payment processor or merchant services provider (like PayKings) who accepts businesses in high-risk industries:
1. Illegal or Regulated Activities
- Drugs & Paraphernalia – Including illegal substances and certain CBD products.
- Gambling & Betting – Online gambling casinos, sports betting, and lottery services.
- Counterfeit Goods – Fake designer brands, knockoff electronics, or pirated software. PayKings doesn’t support payment processing for these types of businesses either.
2. High-Risk Financial Services
- Cryptocurrency Exchanges / Digital Currency Businesses / Blockchain Services (unless approved by PayPal).
- Multi-Level Marketing (MLM) & Pyramid Schemes.
- Unlicensed Money Transfer Services.
- Debt Consolidation Services
- Nutraceutical Businesses
- Auction Houses
- Charitable Organizations
3. Adult & Restricted Content
- Adult Entertainment & Pornography (some PayPal exceptions exist for legal businesses).
- Escort Services
4. Weapons & Dangerous Items
- Firearms, Ammunition, & Explosives.
- Knives, Switchblades, & Other Restricted Weapons.
PayKings is a merchant processor that has great relationships with several banks and an in-house underwriting team that will cross every T and dot every I to make sure that you are presented in the absolute best form possible before your application is sent to a bank. PayKings' area of excellence is getting high risk businesses approved for difficult merchant types, business models, and restricted product types. This is done via PayKings and our network of 20+ banks and PSP's. We’ve even approved a number of businesses with low credit scores and poor credit history to set up merchant accounts and payment processing with us.
PayKings may also be able to provide you with lower fees than PayPal for transaction processing. Nearly every transaction processed by PayPal comes with a certain percentage fee based on the price of the good or service you’re providing. These fees from PayPal can cut significantly into your income, but if you choose PayKings as your merchant account provider it is possible that we can provide you with lower fees for transactions than PayPal’s payment system.
Additionally you’ll be able to utilize our top-notch payment gateways for both customers paying through their computer on the internet (for online shopping and other activities) and point of sale transactions (with card readers at the cash register). While PayKings doesn’t have a dedicated mobile app we offer integration solutions that allow mobile payments through mobile devices such as ios and android phones and tablets. PayKings is set up to accept credit card and debit card payments, wire transfers, digital wallets, electronic funds transfers, and more. We use state-of-the-art technology to secure transactions. For secure transactions and uninterrupted payment processing contact us through our form today!
Frequently Asked Questions
1. Check the reason for the freeze
2. Follow PayPal’s Instructions in the Resolution Center
3. Contact PayPal Customer Support
4. Do not Create a New PayPal Account
5. Consider Alternative Payment Methods
No, PayPal cannot freeze your bank account, but it can restrict access to your PayPal funds and prevent withdrawals if your account is under review. If PayPal suspects fraud or legal violations, it may freeze your PayPal balance, reverse transactions, or report suspicious activity to banks or authorities.
Your Paypal account may be frozen due to suspicious or unusual activity such as unexpected large transfers and multiple chargebacks. Your account may also be frozen due to verification issues, policy violations, a negative balance, and unpaid fees.
Unfortunately if your account has been frozen the only way to get access to your frozen PayPal money is to go through PayPal’s resolution process. PayPal will likely require you to provide certain documentation before they can unfreeze your account.
Category: