Yes, financial institutions do typically have "questions" they need "answered" before making quarter million dollar loans to anonymous e-mail addresses. There's no reason to put those in scare quotes, and it is very much a loan. PayPal is the company making the credit card charges, and if they end up being part of a scam or simply a poorly managed venture, PayPal is on the hook for all the chargebacks -- the account holder could easily disappear or be insolvent months later when they come in.
All the raised funds are at risk, for PayPal, for the 6-12 month period they can be reversed. Even if donors do so without a valid reason, PayPal gets hit with chargeback fees and needs to maintain a <1% reversal rate company-wide just to do business with Visa and MasterCard. They're willing to let their algorithms evaluate small risks (the typical eBay buyer/seller), but a human steps in to do the underwriting for larger volume accounts, just like at every MSP and bank.
The account got flagged for manual review, answered some questions, and was open to accept payments again within the same day. That's better than most banks I know which will take at least a few business days to approve a merchant account. If you're going to be accepting hundreds of thousands of dollars with PayPal, it might be smart to call them in advance instead of waiting for them to call you.
Doesn't PayPal urge you rather strongly to connect a bank account with your PP account? I regularly advise clients on creating these accounts, and bank account confirmation is typically the next thing they do after account creation. Does this not apply worldwide ... or do some people actually trust PayPal to hold their money?
Neither an e-mail address nor a bank account number really provides any of the information PayPal would want to know to risk large sums of money on an account: who they are, who's paying them, what those people expect to get for their money, whether that thing is legal in their jurisdiction and not a disallowed use of the service, etc.
All the raised funds are at risk, for PayPal, for the 6-12 month period they can be reversed. Even if donors do so without a valid reason, PayPal gets hit with chargeback fees and needs to maintain a <1% reversal rate company-wide just to do business with Visa and MasterCard. They're willing to let their algorithms evaluate small risks (the typical eBay buyer/seller), but a human steps in to do the underwriting for larger volume accounts, just like at every MSP and bank.
The account got flagged for manual review, answered some questions, and was open to accept payments again within the same day. That's better than most banks I know which will take at least a few business days to approve a merchant account. If you're going to be accepting hundreds of thousands of dollars with PayPal, it might be smart to call them in advance instead of waiting for them to call you.