MerchantGuard™Why PayPal Flags You as "High-Risk"
PayPal's automated risk systems trigger rejections and 180-day reserves. Here's what causes it:
Banned Industries
❌ PayPal: Auto-rejects CBD, adult, crypto, gaming, firearms
✅ Alternatives: Checkout.com, PaymentCloud accept these
PayPal: 0% approval • Alternatives: 71-86%
180-Day Rolling Reserve
❌ PayPal: Holds 10-30% of revenue for 6 months
✅ Alternatives: High-risk PSPs use smaller reserves (5-10%)
PayPal: 180 days • Alternatives: 30-90 days
High Chargeback Rate
❌ PayPal: Flags at 0.5%, reserves at 1%, terminates at 1.5%
✅ Alternatives: High-risk PSPs tolerate 2-3%+
PayPal: 0.5% max • Alts: 2-3% acceptable
MATCH List
❌ PayPal: Auto-rejects any MATCH/TMF history
✅ Alternatives: Some high-risk PSPs evaluate case-by-case
PayPal: 0% approval • Specialists: Considered
Sudden Volume Spikes
❌ PayPal: Freezes account on 2x volume increase
✅ Alternatives: Growth-friendly processors scale with you
PayPal: Conservative • Alts: Growth-optimized
International Sales
❌ PayPal: Flags high non-US transaction ratios
✅ Alternatives: Global PSPs handle cross-border better
PayPal: US-focused • Alts: Multi-region
7 PayPal Alternatives for High-Risk Merchants
Approval odds are ML-predicted based on 8,000+ real merchant outcomes. Your specific odds depend on industry, volume, and risk factors.
Checkout.com
High risk tolerance, global coverage, fast approval
Higher fees (2.9% + $0.30), setup complexity
PaymentCloud
Accepts MATCH merchants, high-risk expertise
Higher rates (3.5-5%), rolling reserves
Durango Merchant Services
Fast approval, dedicated account manager
US-focused, higher fees for risky profiles
Braintree
PayPal integration, fraud tools, scalable
Same parent as PayPal, still rejects high-risk
Authorize.Net
Reliable, widely integrated, fraud suite
Requires separate merchant account, complex
eMerchantBroker
Accepts very high-risk, MATCH merchants
Higher rates (4-7%), longer approval times
Stripe (Low-Risk Only)
Best rates IF approved (2.9% + $0.30)
Auto-rejects high-risk, same policies as PayPal
Takes 8 questions • Get approval odds for all 7 processors • 100% free
Common PayPal Rejection Reasons (And How to Avoid Them)
Understanding why PayPal rejects accounts helps you choose the right alternative:
MATCH List History
Previous termination from any processor
Solution: Use MATCH-friendly PSPs like PaymentCloud
Banned Industry
CBD, adult, crypto, gaming, firearms, vape
Solution: Apply to industry-specific processors
High Chargebacks
Chargeback rate above 0.5-1%
Solution: Use high-risk PSPs with 2-3% tolerance
Account Velocity
Too many applications in short period
Solution: Get approval odds BEFORE applying
"PayPal hit us with a 180-day reserve on $80K and flagged our CBD business as 'prohibited'. MerchantGuard matched us with PaymentCloud in under a minute. Approved in 6 days with NO reserve. Wish I'd found this before wasting 3 months on PayPal."
How to Escape PayPal's High-Risk Trap
Know Your Risk Level
Match processor to your true risk profile
CBD/Adult/Crypto -> PaymentCloud, eMerchantBroker Gaming/High Volume -> Checkout.com Moderate Risk -> Durango, Authorize.Net Don't apply to PayPal clones (Braintree)
Avoid 180-Day Reserves
Choose PSPs with shorter reserve periods
PayPal: 180 days (kills cash flow) High-risk PSPs: 30-90 days Some offer 0% reserves after 6 months Negotiate reserves during application
Understand Fee Structures
High-risk = higher rates, but worth it
PayPal: 2.9% + holds = effective 4-6% High-risk PSPs: 3.5-5% but no holds Consider TOTAL cost, not just rate Reserves cost more than higher rates
Check MATCH Policy
Some PSPs accept MATCH merchants
PayPal: Auto-rejects MATCH PaymentCloud: Evaluates case-by-case eMerchantBroker: MATCH-friendly Reason code matters (some are worse)
Multi-PSP Strategy
Never rely on one processor
Primary: Best approval odds Backup: Different risk model Don't put all volume on PayPal ever Have emergency backup approved
Geographic Coverage
Match PSP to customer locations
US-heavy: Durango, PaymentCloud Global: Checkout.com LATAM: Conekta, Mercado Pago EU: Checkout.com, Adyen
Stop Fighting PayPal. Get Matched in 60 Seconds.
Our ML model analyzes 8,000+ merchant outcomes to predict your approval odds at each PSP. Don't waste time on processors that will reject you or trap you in 180-day reserves.
🚀 Start Free PSP Assessment →Disclaimer: Approval odds are ML predictions based on historical merchant outcomes and should not be considered guarantees. Actual approval depends on underwriting criteria, application quality, and processor risk appetite. MerchantGuard is an educational readiness tool and does not submit applications, negotiate terms, or guarantee approvals. We may earn referral fees from some payment processors.