My payment is on hold, what can I do?

In the past 3 years PayPal has begun ramping up "holds" on customer accounts. This means that money you received automatically gets added to a pending balance in your account, and is released after a set period of time (typically 21 days) if no action is taken. 

Example screenshot of a PayPal payment on hold

This typically happens with new or unused PayPal accounts that aren't accustomed to receiving large amounts of money in one lump sum. PayPal allegedly incorporated this feature to ensure that buyers are protected against scams and actually receive what they're paying for before you collect payment. This mitigates risk for themselves - and the buyer - by reducing the risk of chargeback scams (requiring the buyer to confirm they received the item / service) or seller scams (non-delivery, etc). As you can imagine, this is extremely common for one-time sellers of digital goods / services so we felt it prudent to add this to the FAQ.

First thing to do is remain calm. Although it's a major headache, if your money is held by PayPal, it's still in your PayPal account. You haven't been scammed, you're just being robbed of you time by a billion dollar corporation. Just another normal day, right?

Secondly, not all hope is lost. PayPal has some vague guidelines on how to expedite their "hold" process. Since these instructions are referring to digital goods transactions only, one step is to mark the order as "services processed / rendered" since there is no physical shipping involved. This might prompt the funds to be released automatically, but if not, move on to the next step.

If you've already marked the order as processed and nothing happened, ask the buyer to check the transaction on their end. They might now see a "Confirm receipt" button on their transaction that will let them click to confirm they received the item / service and have the funds released to you immediately. If this option appears, you should be able to withdraw your money right away. Occasionally this link may only appear after 48 hours has passed, so be sure to check it twice if it's not there right away.

If you follow all these steps, but the buyer never gets a "Confirm receipt" link on the transaction, you will unfortunately have to wait out the hold timer for the funds to be released automatically. Due to inconsistencies with how PayPal functions it's hard to pinpoint what exactly causes a payment to be held or how to avoid it, since it varies from year to year. There's nothing the buyer, or PayPal support, can do to assist you beyond that point. It's annoying, and we sympathize greatly with anyone who has issues with PayPal, but it's unfortunately still the preferred way for people to get paid online for the time being, and the "payment hold" feature is just one of the many downsides.