PayPal Payments

I know a lot of MSPs use PayPal to send payments. Is anyone worried about all the issues PayPal is having? The issues are on both sides, Payer and Payee. Some people are experiencing payment holds till they prove what the payment is for or why they are receiving a large ($1500) payment. Payer issues have been that PayPal pulls money from their account or holds it several weeks before actually making payments. I have seen a few companies paying through Tapali or other payment systems. Also Sinclair pays through a horrible system that charges for direct deposit and to send to PayPal but not to print a check… how stupid is that? I wish they all just offered direct deposit. Let me hear your thoughts.

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I have not heard of Paypal issues. I just got over $1K payment from 1 company on paypal. NO drama.

No drama with my several PayPal payments.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.

No issues here.

Think I remember PP requiring SS# when a transaction was/is over $XX. But it was a 1-time thing becuz after that they have record of it. Mine was instant.

It may have something to do with PP issuing 1099s now.

I've used PayPal for years without any problems. However, I have done a lot of work with a bunch of international editors (not MS), and I do know that a lot of folks from outside the US have had various and sundry problems with PayPal. For that reason, the editing group went to another payment system several years ago.

How many legs does a dog have if you call the tail a leg?
"Four. Calling a tail a leg doesn't make it a leg."
-- Abraham Lincoln

No issues here, ever, and using them for years. But any company can hold funds if they have not received verification from the payor's source that the funds have indeed been "collected." If they are in "UCF" status, (uncollected funds), PayPal, just like any bank can choose to wait until they have confirmation of the funds on their side. Sometimes they can decide to release a small amount while waiting for the confirmation that funds were collected.

I haven't had any issues with PayPal at all. I get paid on the days that I expect to get paid on. And it transfers to my bank overnight or sometimes even the same day. I have no complaints at all.

I got this msg last month:
You've received $600+ in goods and services payments this year which the IRS considers taxable income. The problem is that I do not have $600 from any one company so Paypal must be adding things together to warrant the 1099. Some companies that pay thru Paypal issue their own 1099. I am worried that Paypal does not know what money I have received is income and if they are adding companies together, I will have to expense one 1099 from another. It may be a tax nightmare.

Nope. At the end of the year you can use your detailed income and expense records to sort it all out.

You cannot ever depend on any other source to get it right AND the IRS must accept your written, contemporaneous records if there is any question. SO, keep detailed records.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.

I am expecting Paypal to be silent on which transactions went into their 1099. Then it will be a guessing game to figure out what combination of payments (from all sources - shopping, refunds, friends, family, used goods sales, etc.) add up to equal the "income" on the 1099.

I haven't had any specific issues, but I do generally transfer it out of paypal quickly. I don't trust them to let it sit in their hands.

Yes, I'm concerned. I've read some nightmare stories and I'd prefer different options. I dread the thought of having money tied up through paypal.

Absolutely no problems with PP, either with personal or business accounts, with either domestic or international transactions in multiple currencies.

You receive a notification from Paypal each time a payment is sent. If you don't save those, you can do a query by month, year, or a specific date range to reconcile or if you aren't keeping detailed records.

@flygirl wrote:

I am expecting Paypal to be silent on which transactions went into their 1099. Then it will be a guessing game to figure out what combination of payments (from all sources - shopping, refunds, friends, family, used goods sales, etc.) add up to equal the "income" on the 1099.

This has been discussed previously. The current IRS ruling states that PayPal has to report the aggregate of all funds sent to you. PayPal has no way of knowing what is a payment for services and what is a reimbursement. It all gets lumped together. PayPal is responsible for sending you the appropriate 1099 form. Individual MSCs should not be sending you any 1099 forms if they use PayPal to pay you. As Walesmaven pointed out, your detailed records will allow you to sort out how much you were paid versus reimbursements. You have always been responsible for reporting all income even if it fell below the $600 boundary that triggered a 1099 form.

@flygirl wrote:

I got this msg last month:
You've received $600+ in goods and services payments this year which the IRS considers taxable income. The problem is that I do not have $600 from any one company so Paypal must be adding things together to warrant the 1099. Some companies that pay thru Paypal issue their own 1099. I am worried that Paypal does not know what money I have received is income and if they are adding companies together, I will have to expense one 1099 from another. It may be a tax nightmare.

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008

I haven't heard of any issues with PayPal. A quick search did not reveal any alarming news articles.

PayPal makes money by delaying payments. 1M companies pay 100M shoppers $50 on Friday. PayPal releases those funds on Monday. They earn interest on those few days.

This is why they charge a fee to release funds immediately.

"I told myself to quit you; but I don't listen to drunks." -Chris Stapleton

Paypal earns interest if you delay your withdrawal or transfer. The transfer fee is exactly that, a fee. They are making money for offering the convenience.

@purpleicee wrote:

Paypal earns interest if you delay your withdrawal or transfer. The transfer fee is exactly that, a fee. They are making money for offering the convenience.

I always do the free transfer that says "2 - 3 days" I still get my money in my bank account either the same day or overnight.

Sometimes when I need some of the PayPal money right away and do not want the fee, I go to the store and buy one of the smallest bananas at about .14¢, since I will eat it, and take cash back of $100.00. I have made a few banana transactions in a row, for a few hundred, if I really needed it. I always keep a banana with me anyway. The potassium helps when a shop stresses you out!

Paypal has bigger problems than their payment issues.

Edited 1 time(s). Last edit at 10/28/2022 11:07AM by Ms.Baker.

@purpleicee wrote:

Sometimes when I need some of the PayPal money right away and do not want the fee, I go to the store and buy one of the smallest bananas at about .14¢, since I will eat it, and take cash back of $100.00. I have made a few banana transactions in a row, for a few hundred, if I really needed it. I always keep a banana with me anyway. The potassium helps when a shop stresses you out!

HaHa! I was doing that too....until, after a routine checkup, my GP told me my potassium was too high.
"Oh," I said. "Could that be from eating too many bananas?" "Yes," he said.
I was buying the 2 for $1 bananas and making banana bread, banana cake and generally eating them as a snack. "Stop eating them," he said, "and we'll retest in a week".
It was the bananas. Who knew!

Here is another potassium in the bananas issue. There is a naturally occurring radioactive isotope of potassium, K-40. Under just the right conditions which include taking potent diuretics and then taking potassium supplements or eating lots of bananas, a human being may set off the radiation detectors used by US Customs and Border Control. I know because it happened to me. After telling a more detailed version of this story for over a decade, I encountered two other people with essentially the same story. On a related note, patients receiving radioactive iodine treatments for thyroid diseases are routinely given notes from their physician explaining why they may set off radioactivity detectors.

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008

I have never had an issue with PayPal. I definitely prefer direct deposit into my bank account, which is simple and allows me to have free checking.

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