A SaaS business using Paddle for payments and payouts had its account closed without a clear warning. Before February 2026, Paddle asked the business to move payouts from PayPal to bank transfer so payments would keep running smoothly, with no stated warning about risk or possible closure. On May 13, an email said the account was closed for ignoring a
After pushback, Paddle’s risk team apologized on May 14 and said the hold was actually tied to the PayPal transition, then asked for a bank statement. On May 20, the document was accepted, the account was marked as verified, and the payout was released. The account was later permanently closed anyway, while support claimed a closure notice had been sent on May 12 and did not account for the later apology and verification.
Related payment-tool discussions around Paddle and Lemon Squeezy point to the same operating question for a first SaaS: a Merchant of Record can simplify tax, payment, and payout work, but it also becomes a single point of failure if the account is restricted.