PayPal's video KYC horror stories from Indian freelancers
You finished a major client project. The payment hits your PayPal account. You try to withdraw — and everything stops. PayPal wants Video KYC. You complete it. They want it again. Then your funds vanish behind a 180-day wall. This is not a rare glitch. It is a pattern that reveals exactly where your payment platform's priorities sit.
PayPal holds over 439 million active accounts worldwide and processes $1.79 trillion in annual payment volume. Behind those numbers hides a growing list of users whose money, time, and trust have been destroyed by a broken verification system. These PayPal Video KYC horror stories expose what happens when a payment giant treats compliance like a checkbox — and treats its users like afterthoughts.
The verification loop that never ends
In September 2025, a PayPal India user documented one of the most detailed PayPal KYC verification nightmares on record. After 2.5 years with a dormant account, PayPal emailed them to complete mandatory Video KYC. They finished the call on September 10. Confirmation arrived on September 12. Everything seemed fine.
Then they discovered PayPal had changed their name to all caps and merged their address into a single garbled line — without permission. When the user corrected the formatting, PayPal immediately flagged the account as "unverified" and demanded Video KYC again.
The user wrote directly to PayPal's CEO. No reply came. When they complained on social media, PayPal allegedly tried to have their accounts banned rather than fix the problem. The core issue was that PayPal outsourced its Video KYC in India to third-party vendors such as IDfy and Baldor Technologies. These contractors misconfigure accounts during verification, triggering new verification requests. Users then enter an endless loop with no exit.
This is not a one-off case. On Quora, a widely upvoted answer to the question "Is PayPal Video KYC safe?" warned that local verification companies routinely damage account details and offer no data protection guarantees. The PayPal verification problems extend far beyond India, but the Video KYC requirement makes them uniquely painful there.
Frozen funds: the 180-day lie
PayPal's user agreement allows it to hold funds for up to 180 days when it limits an account. The company frames this as a protective measure. In practice, it functions as financial imprisonment for legitimate users.
A UAE-based business owner discovered this firsthand in early 2025. A $45 negative balance on an old, dormant Canadian PayPal account triggered a cascade of events. PayPal escalated the Canadian balance to collections without notifying the customer. Then it froze the UAE business account, which held over $15,000 in active customer funds.: twocountries, two accounts, one broken system.
In the UK, a user submitted their passport for identity verification in November 2025. PayPal confirmed the document was valid. Then it immediately and permanently blocked the account with £400 trapped inside. The user asked why. PayPal said it could not provide a reason but that it was "within their terms and conditions." That case now sits with the UK Financial Ombudsman.
The 180-day promise itself is unreliable. On PayPal's own community forums, users report that funds have been held for 7 months, with PayPal refusing to lift account limitations even after the stated period has expired. One SaleHoo user reported that $5,000 was frozen for over 5 years. Another user on Quora shared that PayPal deducted their entire balance on day 175 — five days before the promised release date.
A class action lawsuit alleged PayPal unlawfully seized funds using automated processes, with one plaintiff losing nearly $27,000 after a six-month freeze and no explanation. In December 2025, the state of Hawaii settled with PayPal for $6 million over what it called a pattern of freezing consumer accounts and seizing funds without notice, explanation, or effective recourse.
If you are a freelancer who depends on timely access to earned income, understanding these risks matters before you choose a platform. Many freelancers now explore PayPal alternatives for international payments to protect their cash flow.
Why PayPal KYC India hits hardest
India's Reserve Bank requires payment platforms to verify user identities under the Know Your Customer rules. However, the RBI does not mandate live video calls specifically. PayPal chose Video KYC as its implementation method—and outsourced the process to local third-party contractors.
No other major international payment platform requires live video calls for Indian users. Wise uses automated selfie matching with document uploads. Stripe relies on document-based verification. Payoneer processes documents without video. Revolut verifies through mobile-based selfie capture powered by machine learning.
PayPal's Video KYC process requires users to have a physical PAN card ready, sit in a well-lit room, enable GPS and camera permissions, maintain a stable internet connection, and be physically present in India with no VPN active. The call is recorded. Users must "dress appropriately." If any element fails — lighting, internet, GPS tagging — the process restarts from scratch.
For Indian freelancers, the PayPal KYC India burden combines with punishing economics. PayPal charges a 4.4% transaction fee plus a 3-4% foreign exchange markup, creating a total effective cost of roughly 7-8% on every international payment received. Modern alternatives like Wise, Winvesta, and Skydo charge between 1-3% with zero FX markup.
The verification barrier and the cost barrier reinforce each other. Freelancers who survive the Video KYC gauntlet still lose a significant slice of every payment to fees. Those who fail verification lose access to all the money they have earned.
What Trustpilot scores reveal about platform priorities
Numbers tell a story that individual complaints cannot. PayPal has a 1.3 out of 5 rating on Trustpilot, based on more than 37,000 reviews. The Better Business Bureau lists over 34,000 complaints filed against PayPal in just three years. These are not the marks of occasional, isolated issues.
The pattern across reviews is consistent. Users describe accounts frozen without warning. They describe submitting documents that get rejected without explanation. They describe customer support agents who repeat scripted responses and offer no resolution path. They describe feeling powerless against a system designed to protect itself rather than its users.
Compare this against modern fintech platforms built around user experience. Wise holds an "Excellent" Trustpilot rating. Payoneer scores a "Great" rating. Revolut earns strong marks for its mobile-first verification that completes in minutes, not days. These platforms invested in automated identity verification systems that work reliably. PayPal invested in a process that generates support tickets.
PayPal's full-year 2025 results underscore the consequences. Active account growth slowed to just 1.1% year-over-year. Transactions per active account declined by 5%. Branded checkout growth fell to just 1% in Q4, down from 6% the previous year. The company announced a $300 million technology restructuring and replaced its CEO. Users are not just complaining — they are leaving.
How modern platforms solve what PayPal will not
The gap between PayPal's approach and modern payment platform verification is not subtle. It is structural.
Wise verifies users through automated selfie matching and document upload. No live video call. No mandatory physical card. The process takes hours, not days, and uses the mid-market exchange rate with no hidden markup. Freelancers get real US and European bank account details to share directly with clients.
Payoneer handles document-based verification with deep marketplace integrations for platforms like Upwork and Fiverr. Verification takes one to three days. The platform does not freeze funds during the review process.
Deel uses Veriff-powered identity checks that complete in minutes. A selfie, a document scan, and automated matching handle the rest. No human agent misconfigures your name or address because no human agent touches your data during verification.
For Indian freelancers specifically, platforms like Winvesta offer zero FX markup, instant FIRA certificates for tax compliance, and straightforward document-based onboarding. When comparing platforms for Indian freelancers, the cost and experience differences are stark.
The common thread among better PayPal alternatives freelancers now choose is simple. They verify identity without weaponising the process. They move money without hiding behind opaque limitation policies. They treat access to your earned income as a right, not a privilege they can revoke without explanation.
The real priority behind the process
PayPal's verification problems are not bugs waiting to be fixed. They are symptoms of a platform that prioritised scale over user experience for two decades and now cannot course-correct quickly enough.
When a company automatically freezes funds, refuses to explain, citing "confidential criteria," holds fundsforr 180 days or longer, and settles state lawsuits for millions of dollars, the system is working as designed. It just is not designed for you.
The $6 million Hawaii settlement used language that every PayPal user should read carefully. The state alleged that PayPal freezes accounts and seizes funds through automated processes, without notice, explanation, or effective recourse. That is not a description of a broken system. That is a description of a system that works perfectly for PayPal's risk management — and terribly for the people whose money sits inside it.
If your income depends on cross-border payments, your choice of platform is not just a convenience decision. It is a financial safety decision. The horror stories are not warnings about what might happen. They are records of what has already happened to thousands of users who trusted the wrong platform with their livelihood.
Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute financial or legal advice. Winvesta makes no representations or warranties about the accuracy or suitability of the content and recommends consulting a professional before making any financial decisions.
Get paid globally. Keep more of it.
No FX markups. No GST. Funds in 1 day.
You finished a major client project. The payment hits your PayPal account. You try to withdraw — and everything stops. PayPal wants Video KYC. You complete it. They want it again. Then your funds vanish behind a 180-day wall. This is not a rare glitch. It is a pattern that reveals exactly where your payment platform's priorities sit.
PayPal holds over 439 million active accounts worldwide and processes $1.79 trillion in annual payment volume. Behind those numbers hides a growing list of users whose money, time, and trust have been destroyed by a broken verification system. These PayPal Video KYC horror stories expose what happens when a payment giant treats compliance like a checkbox — and treats its users like afterthoughts.
The verification loop that never ends
In September 2025, a PayPal India user documented one of the most detailed PayPal KYC verification nightmares on record. After 2.5 years with a dormant account, PayPal emailed them to complete mandatory Video KYC. They finished the call on September 10. Confirmation arrived on September 12. Everything seemed fine.
Then they discovered PayPal had changed their name to all caps and merged their address into a single garbled line — without permission. When the user corrected the formatting, PayPal immediately flagged the account as "unverified" and demanded Video KYC again.
The user wrote directly to PayPal's CEO. No reply came. When they complained on social media, PayPal allegedly tried to have their accounts banned rather than fix the problem. The core issue was that PayPal outsourced its Video KYC in India to third-party vendors such as IDfy and Baldor Technologies. These contractors misconfigure accounts during verification, triggering new verification requests. Users then enter an endless loop with no exit.
This is not a one-off case. On Quora, a widely upvoted answer to the question "Is PayPal Video KYC safe?" warned that local verification companies routinely damage account details and offer no data protection guarantees. The PayPal verification problems extend far beyond India, but the Video KYC requirement makes them uniquely painful there.
Frozen funds: the 180-day lie
PayPal's user agreement allows it to hold funds for up to 180 days when it limits an account. The company frames this as a protective measure. In practice, it functions as financial imprisonment for legitimate users.
A UAE-based business owner discovered this firsthand in early 2025. A $45 negative balance on an old, dormant Canadian PayPal account triggered a cascade of events. PayPal escalated the Canadian balance to collections without notifying the customer. Then it froze the UAE business account, which held over $15,000 in active customer funds.: twocountries, two accounts, one broken system.
In the UK, a user submitted their passport for identity verification in November 2025. PayPal confirmed the document was valid. Then it immediately and permanently blocked the account with £400 trapped inside. The user asked why. PayPal said it could not provide a reason but that it was "within their terms and conditions." That case now sits with the UK Financial Ombudsman.
The 180-day promise itself is unreliable. On PayPal's own community forums, users report that funds have been held for 7 months, with PayPal refusing to lift account limitations even after the stated period has expired. One SaleHoo user reported that $5,000 was frozen for over 5 years. Another user on Quora shared that PayPal deducted their entire balance on day 175 — five days before the promised release date.
A class action lawsuit alleged PayPal unlawfully seized funds using automated processes, with one plaintiff losing nearly $27,000 after a six-month freeze and no explanation. In December 2025, the state of Hawaii settled with PayPal for $6 million over what it called a pattern of freezing consumer accounts and seizing funds without notice, explanation, or effective recourse.
If you are a freelancer who depends on timely access to earned income, understanding these risks matters before you choose a platform. Many freelancers now explore PayPal alternatives for international payments to protect their cash flow.
Why PayPal KYC India hits hardest
India's Reserve Bank requires payment platforms to verify user identities under the Know Your Customer rules. However, the RBI does not mandate live video calls specifically. PayPal chose Video KYC as its implementation method—and outsourced the process to local third-party contractors.
No other major international payment platform requires live video calls for Indian users. Wise uses automated selfie matching with document uploads. Stripe relies on document-based verification. Payoneer processes documents without video. Revolut verifies through mobile-based selfie capture powered by machine learning.
PayPal's Video KYC process requires users to have a physical PAN card ready, sit in a well-lit room, enable GPS and camera permissions, maintain a stable internet connection, and be physically present in India with no VPN active. The call is recorded. Users must "dress appropriately." If any element fails — lighting, internet, GPS tagging — the process restarts from scratch.
For Indian freelancers, the PayPal KYC India burden combines with punishing economics. PayPal charges a 4.4% transaction fee plus a 3-4% foreign exchange markup, creating a total effective cost of roughly 7-8% on every international payment received. Modern alternatives like Wise, Winvesta, and Skydo charge between 1-3% with zero FX markup.
The verification barrier and the cost barrier reinforce each other. Freelancers who survive the Video KYC gauntlet still lose a significant slice of every payment to fees. Those who fail verification lose access to all the money they have earned.
What Trustpilot scores reveal about platform priorities
Numbers tell a story that individual complaints cannot. PayPal has a 1.3 out of 5 rating on Trustpilot, based on more than 37,000 reviews. The Better Business Bureau lists over 34,000 complaints filed against PayPal in just three years. These are not the marks of occasional, isolated issues.
The pattern across reviews is consistent. Users describe accounts frozen without warning. They describe submitting documents that get rejected without explanation. They describe customer support agents who repeat scripted responses and offer no resolution path. They describe feeling powerless against a system designed to protect itself rather than its users.
Compare this against modern fintech platforms built around user experience. Wise holds an "Excellent" Trustpilot rating. Payoneer scores a "Great" rating. Revolut earns strong marks for its mobile-first verification that completes in minutes, not days. These platforms invested in automated identity verification systems that work reliably. PayPal invested in a process that generates support tickets.
PayPal's full-year 2025 results underscore the consequences. Active account growth slowed to just 1.1% year-over-year. Transactions per active account declined by 5%. Branded checkout growth fell to just 1% in Q4, down from 6% the previous year. The company announced a $300 million technology restructuring and replaced its CEO. Users are not just complaining — they are leaving.
How modern platforms solve what PayPal will not
The gap between PayPal's approach and modern payment platform verification is not subtle. It is structural.
Wise verifies users through automated selfie matching and document upload. No live video call. No mandatory physical card. The process takes hours, not days, and uses the mid-market exchange rate with no hidden markup. Freelancers get real US and European bank account details to share directly with clients.
Payoneer handles document-based verification with deep marketplace integrations for platforms like Upwork and Fiverr. Verification takes one to three days. The platform does not freeze funds during the review process.
Deel uses Veriff-powered identity checks that complete in minutes. A selfie, a document scan, and automated matching handle the rest. No human agent misconfigures your name or address because no human agent touches your data during verification.
For Indian freelancers specifically, platforms like Winvesta offer zero FX markup, instant FIRA certificates for tax compliance, and straightforward document-based onboarding. When comparing platforms for Indian freelancers, the cost and experience differences are stark.
The common thread among better PayPal alternatives freelancers now choose is simple. They verify identity without weaponising the process. They move money without hiding behind opaque limitation policies. They treat access to your earned income as a right, not a privilege they can revoke without explanation.
The real priority behind the process
PayPal's verification problems are not bugs waiting to be fixed. They are symptoms of a platform that prioritised scale over user experience for two decades and now cannot course-correct quickly enough.
When a company automatically freezes funds, refuses to explain, citing "confidential criteria," holds fundsforr 180 days or longer, and settles state lawsuits for millions of dollars, the system is working as designed. It just is not designed for you.
The $6 million Hawaii settlement used language that every PayPal user should read carefully. The state alleged that PayPal freezes accounts and seizes funds through automated processes, without notice, explanation, or effective recourse. That is not a description of a broken system. That is a description of a system that works perfectly for PayPal's risk management — and terribly for the people whose money sits inside it.
If your income depends on cross-border payments, your choice of platform is not just a convenience decision. It is a financial safety decision. The horror stories are not warnings about what might happen. They are records of what has already happened to thousands of users who trusted the wrong platform with their livelihood.
Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute financial or legal advice. Winvesta makes no representations or warranties about the accuracy or suitability of the content and recommends consulting a professional before making any financial decisions.
Get paid globally. Keep more of it.
No FX markups. No GST. Funds in 1 day.
