PayPal Pro Risk Vetting and Approval: Power Your PayPal Underwriting With CorpAgent
17-08-2020
Businesses applying for certain PayPal products may be taken through our risk vetting process. It is a procedure PayPal verifies your documents to ensure the legitimacy of your business. Businesses with good transactional performance history go through the underwriting process faster.
Dropshippers, especially those active in the US market, are mostly skilled in using various types of PayPal accounts. But PayPal is not an easy partner. If you are a long-time partner with PayPal, you may have probably had enough with PayPal’s constant requests for verification of ownership, proofs of business activities and transactions.
When your cross-border e-commerce business(es) reach a certain transaction level, you will probably need to go through a process called Underwriting.
In this article, CorpAgent guides you through the underwriting process with PayPal. Firstly, we advise you to view underwriting as an asset to the account owner, rather a liability. Over the past ten years, we have helped hundreds of dropshipping businesses successfully go through PayPal’s underwriting procedures. It is actually one of our most pursued services.
See more: CorpAgent Exclusive: PayPal Pro For Singapore Company
Table of Contents
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What is PayPal Underwriting? Who need PayPal Underwriting? Benefits of PayPal Underwriting The underwriting process Misconceptions of PayPal underwriting |
What is PayPal Underwriting? Who need PayPal Underwriting?
PayPal Underwriting is a set of procedures in which PayPal reviews the operations of a business account to decide whether the account meets PayPal’s In doing this, PayPal may request for additional business and financial documents from the merchant. On rare occasions, PayPal may set aside a pool of money as reserve in your PayPal account to help ensure that you’re able to meet the liabilities incurred from chargebacks, claims or reversals.
- Large volume businesses that process a significant monthly sales volume.
- Businesses that are considered more risky by most payment processors, such as travel or ticket sales and membership services.
See more: PayPal’s Underwriting and Business Risk Management
Benefits of PayPal Underwriting
Underwriting is a complicated process, and it does not come with a 100% success rate. The process is conducted and supervised by independent business functions in PayPal to make sure business accounts functions at the most acceptable level of risks. However, successful underwriting is rewarding.
- Approved accounts are granted lower fee per transaction. Business with high transaction count will benefit greatly from this.
- Approved accounts are less likely faced with sudden account limitation or account suspense. Every dropshipping business knows the nuisance of getting their account slammed.
- Approved accounts gain access to PayPal’s other advanced services including PayPal Pro, Reference Transaction, etc., which are useful for businesses to optimize their checkout process. PayPal Pro account can only be issued to approved accounts, which have already passed the underwriting procedures.
- Having access to PayPal Pro and PayPal’s other add-ons helps create a professional image and gain buyers’ trust
However, PayPal Pro is not available to businesses based in certain countries. For dropshipping teams registered in SEA countries, for example, our clients are advised to set up a new company in Singapore or Hong Kong to gain easier access to PayPal Payments Pro services.
The PayPal Pro Underwriting process
If your business already has an active PayPal Business account, CorpAgent will guide you through the underwriting process with PayPal.
If your business has not registered for a PayPal Business account yet, CorpAgent will again guide you through the FOUR steps of underwriting:
Step 1: Register for a company in Singapore
See CorpAgent’s Singapore Company Formation package
Step 2: Prepare the necessary documents to open a PayPal Business account
Overall, the information needed includes:
- Information about the company
- Information about the account owner
- Other, related information
CorpAgent will be specially useful for re-applying PayPal users i.e. those that have an unfavorable history with PayPal (e.g. 180-day limit punishment, account lock, and the likes). With years of experience dealing with PayPal matters, CorpAgent will get you through the re-applying process.
Step 3: Register for a PayPal Business account
CorpAgent will coordinate with PayPal Singapore to open a PayPal Business account for the (newly-formed) Singapore company.
Step 4: Complete the PayPal Pro Underwriting process
You should expect to provide various proofs of business which include but not limited to:
- Verification of identity
- Financial statements
- Proofs of transactions (invoices/documents)
- Transaction history with PayPal
CorpAgent will help you arrange and present the information effectively to PayPal Singapore.
CorpAgent notes
- The success rate depends partly on how clear and precise the information submitted for the process is. PayPal will carefully review and verify all the information provided, so it will help both sides if the documents/information provided come with clarity and honesty.
- After the underwriting is approved, each PayPal Business account will be assigned a certain HOLD and RESERVE. Holds and reserves are tied to the risk level associated with the account, as estimated by PayPal, and can be adjusted if the account shows improved or worsened dispute history. You can simply submit for change but CorpAgent’s close relationship with PayPal will for sure help you go through the process more seamlessly.
- CorpAgent’s close association with PayPal Singapore helps speed up the underwriting process. CorpAgent will help you go through all the collected documents/information and give it a preliminary review before these are submitted to PayPal. CorpAgent’s years of experience in the business will be helpful in pointing out the possible irks that may slow down or completely hamper the process. In the course of running the PayPal Payment Pro account, CorpAgent will be constantly helpful (with dedicated Account Manager) in facilitating account reviews or increasing transaction limits (for example, during every peak season).
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HOLD: Payments received may be temporarily held in a pending balance. Assuming there are no buyer disputes, these will be moved into your available balance within 21 days (or sooner). Through holds, PayPal helps to ensure that there are funds in the seller’s account to cover potential claims, chargebacks and returns. RESERVE: Reserves typically affect sellers who accept larger volumes of payments and whose businesses pose a higher than average risk of closing. To ensure buyers can receive refunds, PayPal creates a reserve fund from a proportion of a seller’s PayPal balance. This reserve fund is typically released on a rolling basis after a certain number of days have passed without a reported problem from your buyers. See more at PayPal: Holding received funds in a pending balance |
Misunderstanding about PayPal Pro Underwriting
My PayPal Business account is 100% safe after being approved.
The answer is, 100% is a total reach, but underwriting does help you operate your dropshipping business more smoothly. Ideally, a 100% safe business is a well-complying business.
- Always keep information related to the account holder, the company’s financials, and related matters up-to-date, by PayPal’s standards
- Optimize store operations by increasing product quality, customer service quality, etc. to minimize refunds/chargebacks/disputes. Poor operation will affect your chance to be granted higher transaction limit or lower reserve level if any.
- No violations of PayPal’s T&C (e.g. violation of copyrights, cheating, etc.), which may result in immediate termination of service. CorpAgent will mostly be helpful in your two-way disputes, but certain violations cannot be helped.
Read more: How to not get banned by PayPal
In conclusion, PayPal Underwriting can be tricky, and you know it. For high-risk Dropshipping/software businesses, maintaining a high-trust PayPal Business account (to the safest!) is as challenging to them as how to grow their business to the fullest. You see how the PayPal Underwriting process can help clear that problem for you. But on the other hand, mis-translations of the requirements in the underwriting process can result in unwanted consequences.
Contact us for PayPal Business Underwriting at admin@corpagent.asia or fill in the Contact Form.
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