Exceeded sending limit - except I didn't? Help!

[quaintmagazine]

Hi there,

I have an unverified account with $120 (ish) sitting in it, in paypal balance. I am trying to send SMALL payments to numerous individuals ($6 a piece). I was able to send the first payment no problems, but then I keep getting a message saying "the payment you are trying to send exceeds you sending limit of $500". Er, no it doesn't. It's SIX DOLLARS. I've only send SIX BUCKS using this account so far. What gives? I'd really rather not link this account to my bank account, as the paypal account I'm using is for a not-for-profit literary magazine/business. This is a bug, surely? How can I fix it quickly? I have writers who need to be paid ASAP. I sent a message to paypal about it and received a completely useless response...

[paLMike14]

I have the same problem... Ive only sent 20$ total and it says I can still send up to 500$ total. But when I go to send money it tells me I have exceeded my sending limit. 

[snowshoe]

An unverified account has limits but, don't take those numbers at face value.  PayPal will let you do some transactions but, at some point if you don't verify your account, you won't be able to do much.  Once you verify your account, the problems and limits go away.

[quaintmagazine]

This seems like really shady business practice? I only set up my account perhaps a month ago. The response I got from Paypal customer service earlier today was that I needed to verify my account to send any further money but....that makes no sense, given their "$500 limit" policy. Ugh. I mean, it's fine, I CAN link the account to my bank accout, I'd just really, really rather not (it's a business account for a non-profit, and I'm not keen on linking it to my personal finances as its nice to keep the two separate). There's no way I can get around this, I take it?

[snowshoe]

Don't blame "everything" on PayPal as there are legal requirements behind verification.  However, PayPal should be a bit more forward and simply say, you must verify your account else don't bother.  Other processers do that, for example, try opening a Square Account without a bank account.

Here's what we've leaned from hands-on experience:

Financial institutions such as banks, credit card issues and 3rd party transaction processors such as PayPal are required by law to verify the identity of the person behind any and all Accounts into which money is collected.  This stems from the USA Patriot Act, Title III, Anti-money laundering to prevent terrorism where as institutions put into place reasonable steps to identify beneficial owners of bank accounts and those who are authorized to use or route funds through payable-through accounts.

 PayPal takes advantage of the fact that you had to prove to the bank you are who you say you are.  Therefore, by linking and confirming your bank account, the background work has already been done and PayPal has now met the legal requirements to protect themselves.

PayPal's FAQs state: To Verify your PayPal account, just link your bank account to your PayPal account or be approved for PayPal Smart Connect or the PayPal Plus MasterCard®. (Note, the PayPal Plus MasterCard was introduced in 2001.  In 2011 the name was changed to the PayPal Extras MasterCard.)

From experience, we’ve learned that in order to use PayPal without limits, it best to link and confirm a bank account (checking account) plus link and confirm a credit card (not the prepaid type) or register your SSN # or do all three.  (Note, when you link and confirm a credit card, this acts as additional proof of ID, a backup funding source and allows you to do instant transfers verses sending eChecks or in the UK eCheques.)