Webhost sees Paypal accounts closed

by Brian Turner

Major webhosting provider Sprintserve.net announced in an emergency bulletin today that Paypal has closed its Paypal accounts.

Using different Paypal accounts for different subsidiaries, Paypal stated this represented “excessive risk” because of possible links between the accounts.

The Paypal accounts were first “limited” to prevent funds being withdrawn, then finally closed.

While the company is able to move clients to other merchant gateway methods, it raises important questions about merchant and merchant gateway behaviour.

First is the fact that merchants should be careful not to rely entirely on a single processor for their funds processing, so that in an extreme situation, the loss of funds is minimised.

Additionally, it also raises continued questions about the accountability of merchant providers, who can close accounts and retain monies from them.

On a day when Google announced the launch of rival payment gateway Google Checkout, questions about the place and behaviour of online payment processors – and the rights of merchants and customers in the event of a dispute – can only be acute.

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