How to deal with PayPal when you travel

by Dave from The Longest Way Home ~ April 7th, 2011. Updated on May 6th, 2011. Published in: Travel blog » How to guides ... » How to live overseas.
Indian Guard at the Red Fort

Traveling to "certain" countries might just trigger PayPal's security system and get your account blocked!

What is PayPal, and why it’s good for travel?

PayPal is basically a financial middleman for online transactions. You can make online payments safely due to their strict security processes, and international border-less transactions.

It enables you to make payments without having to enter your credit card details on many sites.

Moreover, it’s a great way to receive payments for those doing online work, or sales.

How does PayPal work?

Simple. You set up an account. Send a payee your email address which is now registered with paypal, and they can then pay you via their own PayPal account, or through a secure webpage with a credit card.

Alternatively, you can just email an invoice to someone via PayPal.

You can also set up buttons for purchases or donations on your website.

After this, it gets a bit more complicated as there are various types of PayPal accounts. Unverified PersonalPersonal, Premier, Business, Student.

Basically a Unverified Personal is quite restricted. You can’t make Merchant services, but can receive payments.

Give PayPal your address, telephone numbers, credit card details and you become verified once they remove $2 dollars from your credit card as part of their process. The world of online payments can now begin.

But, be careful if you are traveling out of your home country and using PayPal, you might just get your account and money frozen or worse

paypal logo

(logo ©PayPal

The problem with traveling and using PayPal

PayPal track your ip address for security reasons. Your ip address is basically the internet address of where you are located. If this changes, it tells PayPal that perhaps someone other than you from a different location is trying to access your account. AKA it’s an alarm signal to PayPal to see you change location.

As you can imagine, as a traveler moving from country to country this can cause a lot of problems.

Restricted PayPal account!

This is the dreaded statement that many a traveler will have heart palpitations over when they login ready to pay a bill. It basically means you cannot make any payments. But, you can still receive.

You will now need to jump through several painful loops to undo this situation and free up your money, and your PayPal account.

How to unrestrict your PayPal account

There will be instructions on how to do this on your PayPal account. The requirements of which seem to change every year or so. Recently they have been requesting you to give them your home telephone number, and then tell you to wait for a call with a code you can then enter into your account to unblock it.

For a traveler, that can be a serious difficulty as PayPal insist the number you give them is from your home address. So unless you are on roaming. And don’t mind a huge bill, this can be a dead-end.

Another request that’s come in is for you to fax, or email in your passport details. Again, this is not always an easy thing to do.

Options to prevent your PayPal account from getting restricted

– Travel notifications: Many users are now reporting the long-awaited travel notifications option appearing in their PayPal dashboards. Use it!! Not every country has them displaying yet, but if you are lucky enough to see this option, then fill in the details and let PayPal know what country you’ll be accessing your account from. Otherwise, keep reading.

Send a message: Before traveling, send them a message through your PayPal account telling them you will be in “____” country next. This is often reported to work, and if not, gives you a little ground to stand on should you still be restricted.

They will send you an email confirming the countries you have told them you will be logging in from. Should you be traveling, they will then only ask for other verification methods; rather than a home telephone number.

Telephone them: Call them before you travel.Yes, depending on your country, PayPal may have options for you. The most common one is to open another account in the new country you are going to. This is not sensible to me, but it may work for shorter term travelers.

Don’t try to cheat: Do not use a VPN system to set up a proxy server. It may work for a short while. But unless you really, really know what you were doing. You are asking for trouble should PayPal catch you. And yes, I met a Swedish web designer with just that problem recently and his account was closed.

Don’t log in everywhere! Keep a spreadsheet with all your accounts on it. PayPal send you an email when you get paid. There’s no need to log in and check all the time. Especially if you are only passing through a country briefly.

Invoice people: If a company or person requests an invoice before payment. Make up an email template and send it to them, together with your PayPal or other payment details. Most companies requesting an invoice before payment will accept this.

Play their game: Open a different Basic PayPal account in any country you are travelling through to deal with small transactions. And, don’t use your main account until you are in a better location.

Other tips on dealing with PayPal

Don’t save: Do not keep a vast amount of money in your PayPal account. It’s basically earning PayPal interest, and if you do get restricted, at least you will not loose everything.

Fraud Squad: Ask to speak with the fraud department should you get one of the less competent call center employees not understanding you (a serious problem). The fraud department is based in the USA, so you should be prepared for that time zone when calling.

Blood pressure: Be prepared for many phone calls. And, a terrible IVR system (automated machines). Keep your mind cool, and as you wait for a long periods on the phone try to work on other projects to avoid all that pent-up frustration from getting to you.

Okay, cheat: If you can, get someone from your “home number” to pretend to be you should your account be restricted and they want to call you. Just be sure you can trust the person with your information, and they have your details.

Alternatives to PayPal

Lastly you might look at alternatives to PayPal. Whilst none are widely used as PayPal, you might find one helpful depending on your own needs.

You’ll need to read their terms and conditions carefully, as many have country restrictions and are not accepted as widely as PayPal.

Beware of fake PayPal websites

If you’ve run into trouble with a restricted PayPal account when traveling, the chances are you’ll have come across many “I hate PayPal ” websites out there. Including many offering solutions, ebooks, and VPN’s to solve all your problems. My advice is to leave them all alone, and deal with PayPal yourself.

How to calculate PayPal fees

PayPal charge you for payments and transactions if you providing a service, or selling something. A personal payment is free, but do too many of these any they will block your account!

Many people add-on the PayPal charges to anyone paying for a service. The easiest way to calculate how much this would be is to use an online PayPal fee calculator.

PayPal for location independent travelers a good thing, or a bad thing?

PayPal has many haters. And, if things go wrong, many more. But, the system does work. And, when you look at the alternatives PayPal is still way ahead. The company has made a fortune by getting in early. If you have ever seen their data centers, you’ll see just how high-tech and big this e-bay company is.

Love it or hate, many are stuck with it for now. Taking some of the above suggestions into account before, or during your travel may help you stay clear of any annoying, frustrating, and challenging issues you will encounter.

Feel free in linking to this article as a reference that may help you or others in using PayPal when traveling

This is an additional editorial featuring travel related articles, view points, conversational topics and helpful resources based on experiences I’ve learned from my around the world journey

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34 Great responses to How to deal with PayPal when you travel

  1. Iain says:

    PayPal have inflicted similar pain on me, while I lived in China, but only ever said the checks were for tax purposes. Proving that you’re the person at a particular address by forcing you to answer a phonecall is harebrained, and I was never given the option of faxing or emailing a passport copy, because they wanted to establish that I had given them the correct address. Their idea of customer service – forcing you to hold for a long long time to even have an outside chance of talking to a human – makes things that much more annoying.

    • I agree with you 100% about this ridiculous phone call requirement. It simply doesn’t prove anything. Though, like I wrote above. If you contact them before being in a new place, they will message back and note it. Maybe this can help in the future

  2. iamthewitch says:

    Great tip! I didn’t know about all these restrictions with PayPal simply because I’ve never really logged in my account out of my country. But after reading this, I think I shouldn’t do so unless really necessary!

  3. This is a great article and it does through up some interesting points. I’ve been through everything listed above but like you said… Paypal is still the front runner. I’m going to be looking into it in the coming week and see if I cant refine the process somehow and reduce both Paypal and bank charges…. I’m not moving around so much but still need to go through my bank account at home because they don’t recognise Cambodia….

    • Hey Aaron. Reducing charges is a big thing to avoid all these 3% or $5 charges which add up quickly. There are a few banks that have international agreements. It’s a case of shopping around I am afraid. And then changing banks.

  4. Katie says:

    Great post – a lot of good information!

    Is there any reason why you couldn’t just give a trusted friend/family member back in the US your PayPal info so they can access it for you, making transfers or payments as needed? Seems like that could be an easy solution.

    • Hi Katie, thanks for stopping by. Yes, there’s nothing stopping you from having a family member making payments or transfers from back home. The problem starts when you start making more and more online transactions. Sometimes it’s a simply thing like paying a Skype account quickly, or accepting a couple of payments. After a while, I am not sure if anyone would have the patience to do this for somebody.

      Plus, they would have to know all your details otherwise the account would be completely blocked should paypal suspect a person to be someone else! I’d stick to just messaging them first. But if you don’t use the service that often, then yes, having someone from home should do the trick :)

  5. John Wilson says:

    All good advice.
    Having dealt with paypal over the years, it is a pains when they block you, but they are doing what you want them to do.
    Jumping through the hoops is a chore, but it does work.
    If you talk to the right people, it can get straight relatively quickly.
    Good tips for all.
    Enjoy the mozey, and say hi to people!
    The Big Mozey

  6. Anna's World says:

    I dont earn online, but have got a paypal account for online payments. I searched paypals site for information on using it when traveling and couldnt find anything. Thank you for writing this, I know what to do thanks to you, not paypal!

  7. brilliant article, THANK YOU.

  8. Craig says:

    Today Andy showed off a travel planning screen that I too can’t access (probably because I’m in Peru).

    In your account profile, go to the old profile view (not the new one) and look for link on the left column (of the three).

    • Unfortunately there are some countries PayPal just don’t consider. Though, it is good to see them making a move on this. But, they are a slow Juggernaut of a company so who knows when this will actually come online and work without issue.

  9. Jason says:

    It’s interesting Dave to read your advice on this service. You must have relied heavily on it, and other similar services over the past several years. No doubt you have watched these services evolve as well.

    I for one, haven’t had to deal with this issue, as most of my travel has been in short bursts for the last 5 or 6 years. I have used the PayPal service for a few things over the years, and found their system and service to be Ok, but not great.

    Great food for thought for if and when I hit the road full time again.

    • Indeed, I’ve had my run ins with PayPal over the years. I wrote this, as it would have saved me a lot of trouble, money and time had someone written it earlier. I’ll include PayPal on this as they don’t mention mapping IP addresses, though I see they are now adding a travel section. Though, it’s still not working well. I don’t understand why one would offer a service, and then not say how you can or cannot use it?

  10. I recently had a PayPal account closed because I was accepting donations, and they somehow figured out I was giving these donations to local charities. (Posting details about the charities on my site was the reason for sure)

    The message I received was that one or more of the countries I was accepting donations for was restricted in their terms-of-service. But instead of telling me which one, they directed me to read the complete terms-of-service for EVERY country! Fat chance.

    They didn’t give me a warning, and the decision was final.

    PayPal telling me what I can & can’t use MY money for, is a bit disturbing.

    It’s not like I’m smuggling weapons with $100 a month in donations, I’m helping a few poor kids get medical treatment…

    Messed up.

    • India was practically banned from PayPal last year. As I’ve written in other comments here, if PayPal would list clearly what you can and cannot do, it would be a huge benefit rather than 200 pages of terms and conditions. Sadly, there really is no alternative, so one is stuck with them.

  11. Earl says:

    Over the past year, I’ve had my PayPal account frozen 9 times, which is exactly how many transactions I’ve made. Of course, I was in a different country each time I made a transaction and as you mentioned, PayPal’s system doesn’t like that too much.

    However, three weeks ago, I had a long conversation with the PayPal support guy and he offered me some solid solutions. Apparently, they are working on a system that is similar to the system credit cards have in place where you can log into your account and list the countries that you will be traveling to so that they don’t block your account when you make transactions from these countries. And even though this is not up and running yet, the PayPal support team can still enter a special code into your account (via phone) that notifies the system that you travel around quite a bit (which reduces the risk of having your account frozen).

    In addition, you can request that PayPal sends you a Security Key, which is a very thin, credit card sized card. Whenever you log into PayPal, you first press the button on the card and it generates a random security code. When you log in to your account you will be asked for this additional code and if you provide it, your account won’t be blocked.

    I’ve now used this twice and it has worked perfectly.

    • Indeed, Earl, as soon as PayPal take on more of an international banking style of security the better. As mentioned above, their travel logging system is still not up and running. A pity, as it seems quite easy to implement, even from an automated stand point.

      A major factor that’s limiting many people, is the USA”centric” approach to many of these services. AKA no USA accounts, more loop holes to jump through

  12. Great article, very relevant to me as I’ll be traveling a lot over the next few years.

    I was wondering about PayPal calling you to unblock your account. I believe Skype allows you to buy (for a small fee) a regular telephone number that rings through to Skype on your computer, no matter where you are. That might be a good workaround.

    • It’s a good point Niall. And, though I have not tried myself some others have reported back that PayPal are aware of Skype’s numbers in making these calls. That’s said, it would be worth a shot, and just play dumb. It is 2011 after all and many people do use Skype as a main phone number!

  13. Thanks for the info. Some great advice there!

  14. Lois says:

    Thanks for the tips Dave! I’ve been wanting to read this post in a long time. I will really be able to use this information especially while we’re still on the road.

  15. JB says:

    I just had my account blocked again and this time, after some searching, I noticed there is now a section available for creating travel notifications. I went ahead and used it but will have to wait to see if it works or not. Interestingly, when I tried to enter Paraguay, it wouldn’t accept that country.

    As a general observation, in my personal case I have noticed that the only time I have ever been blocked is when I try to use my account multiple times from a country. Usually I use my account only to receive money so I just do one monthly transfer from PayPal to my bank account and I rarely get locked out. This time, as in the previous occasion, I logged in to do my monthly transfer and had no problem. But, then I forgot to check some detail on a transaction and logged in again, which led to the account restriction. I would love to hear if this sounds about right for others.

    • I’ve noticed this trend too. Seems like the more activity there is on your account, the more it alerts their system.

      I think this also applies to lots of small/big payments going into your account over a short duration too.

      Hopefully the travel notifications system will help with all this. Though I note it’s not available in certain countries. I think the main user based countries will be first to get it.

      So yes, you are not alone.

  16. Leslie says:

    Paypal is a convenient way to send money to others without cutting checks. I don’t use it to pay bills, but I have gotten paid for freelance assignments that way. Thanks for the detailed overview!

  17. Glen Aldridge says:

    I understand about making Deposits into my Paypal Account but if I am in The Philippines or Thailand how do I get access to my money from within these countries? Open up a local Bank Account & then wait for 7-14 days for the funds to be transferred? Thanks for your help.

  18. Glen Aldridge says:

    Hi Dave, Maybe I didn’t explain my post very well. I can transfer funds to or from my Home Bank Account online. Once the funds are in my Paypal account & I am in the Philippines or Thailand how do you get access? The only way I know of is to do a transfer to your bank account which would need to be a local account in the country you are presently travelling in. Many Banks in Asian countries don’t recognize Paypal & also it can be difficult to open an account without residency. In The Philippines you can use your ATM card to withdraw direct from your Home Account as long as you dont mind the P200 ($7.00) fee for a maximum withdrawal of $200.

    • Hi Glen,

      Yes that’s right. You can only transfer your Paypal funds to your bank account or credit card. And if you are withdrawing money from your overseas account there are often charges involved. Best thing to do is have a bank account that does not charge for overseas withdrawals plus find a bank overseas that doesn’t charge you ATM fees. Unfortunately both The Philippines and Thailand are both notorious for charging ATM fees. Only way around it is to find an international bank that does not charge ATM fees and is in both countries.

  19. Larry says:

    Great info,
    I opened my account in the UK when i was on vacation,with the help of my sister. I am based in a restricted country and get to make a lot of payments using my account from my base (restricted country) and i got limited once (but with my sister help we were able to lift the limitation).

    Now, she is so busy and cant always be bugging her with my business. What can i do? will the travel section help, or vpn with UK IP( which i am currently exploring). This restriction really hampers my business a lot and i am short of ideas now. I need help as i only travel to the uk once in about 2 to 3 years.