jeffweico | 01-04-2014 03:17 AM | Re: Paypal accepts EIN without a SSN? These are two separate issues.
PayPal and Amazon will both accept an EIN ONLY for tax reporting purposes. They gather this information to comply with IRS rules. This is one issue.
The OTHER issue is that your account gets flagged for potential fraud, or your sales ramp up to the point where they use underwriting to validate your account. In this case, they will ask for the SSN of the business owner REGARDLESS of whether or not a EIN is on file. In this situation, they want the information for IDENTITY VERIFICATION.
The best way to avoid the second situation is to stay under the radar. I cannot GUARANTEE this number, but $5,000 per month in gross sales is where most payment processors want to start digging into details of your business so they can properly assess their risk. Since there is most likely very little information available about your small business, it boils down to identity verification, credit history and what you are selling. If the risk managers do not like what they see, they close the account. This is true of ALL payment processors. What sets PayPal apart is that they do NOT gather this information upfront. If you apply for a real merchant account, you would have to supply all of this information AND they would ask for an estimate of your monthly gross sales. Most likely they would run your credit either way. If you have great credit, you are most likely approved. If your credit is just ok, but has a few dings, then they may want a rolling reserve, or they may put a monthly cap on your sales. Again, the difference is they will tell you this UP FRONT, while PayPal does all of this after the fact.
My response might be a little long in this case, but I think it is important to understand the how and why of how these entities actually work. |