Score Breakdown by Category
How PayPal's published terms rate across the methodology's evaluation categories, weighted by real-world impact on a merchant. Automated assessment, as of June 28, 2026.
Why this score: PayPal's published material gives it broad discretion over funds and the account through three overlapping tools: risk-based holds on payments (commonly up to 21 days and sometimes longer), account limitations that can pause withdrawals and transfers while PayPal reviews, and rolling or minimum reserves on business accounts. Merchants often experience these as a freeze. The specific criteria that drive a given hold or reserve are not published.
This is a description of what the published material permits, not a finding that PayPal acted unlawfully in any case.
Why this score: PayPal's US User Agreement routes disputes to binding individual arbitration administered by the AAA, with a class-action waiver and a jury waiver. There is a 30-day mail-in opt-out, and a fee provision under which PayPal pays the arbitration fees at the claimant's request when the relief sought is $10,000 or less. The class waiver cuts both ways: it removes aggregate pressure, but it also strips a processor of the scale defense in a single small claim.
Why this score: like most processor agreements, PayPal's terms shift risk to the user, including liquidated damages reported at up to $2,500 per Acceptable Use Policy violation. The practical nuance for a held balance is that the held balance itself is a direct, liquidated amount PayPal owes you, not a consequential loss, so a consequential-damages disclaimer generally does not bar a claim for the balance itself.
Why this score: PayPal publishes a User Agreement, an Acceptable Use Policy, and detailed help and business-resource pages on holds and reserves. The opacity is on the risk side: PayPal lists general categories of risk factors but not the specific proprietary criteria or model output that drives an individual hold, limitation, or reserve.
Why this score: covered in detail on the companion PayPal Privacy Statement review. PayPal's Privacy Statement describes sharing with service providers, with merchants and partners, with payment networks, among the PayPal group, and for advertising. For the fund-hold context, the relevant point is that an information or verification gap is a common stated trigger for a limitation.
Why this score: you can close a PayPal account, but a risk hold, an open limitation, or a reserve can persist while PayPal works through the exposure window, and the 180-day figure appears as the outer window for certain holds. The held balance remains an amount PayPal owes; the question is timing and the risk rationale.
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