HeldFundsThe Paddle file
Paddle is a payment company that sells other companies' software as if it were its own. In the industry this is called being a merchant of record: the software company hands Paddle the checkout, and Paddle becomes the legal seller, collects the money, remits the sales tax, and pays the software company later, minus its fee.
Two groups of people end up dealing with the consequences of that arrangement. Cardholders, who see a company they have never heard of on their statement and cannot work out what they bought. And merchants, who discover that the money their customers paid is not theirs until Paddle sends it, and that if Paddle closes the account, the money stays where it is.
This file collects what can be documented about both.
- What sellers report
- Of 34 verified seller accounts on this site, 30 were still waiting for their money when the seller last wrote, 3 say it was paid, and 1 is unclear. The amounts stated by the 15 sellers who give one add up to $175,616, whether or not the money later came back; the median is $2,200. This is a count of what could be verified in public, not a rate among Paddle's sellers. Of the 34 cases, 14 say Paddle told them the balance would be held about six months — 10 in the words "180 days", 4 as "six months". In the 21 taken from Trustpilot, eight sellers say they were told 180 days, and ten say the date had passed without the money being paid. The rest are three Better Business Bureau complaints, eight Reddit posts, one Hacker News comment and one report sent to this site. The three released cases: a founder on Hacker News whose account was frozen in a quarterly review in July 2025 over a name mismatch, told 180 days, and paid "within a week"; a first payout held for "additional checks" until 19 February; and an account blocked in September 2026 whose withheld money, the seller wrote on 17 October, had been sent. Each is the seller's own account, not our finding. The two closure reviews on Capterra are the same sellers, in nearly the same words, as two of the Trustpilot reviews, so they are counted once. Detail below; every count and the counting rules are on the data page, with a machine-readable copy.
- When Paddle can close the account
- Paddle's Master Services Agreement, last updated 6 October 2026, lets Paddle end it by immediate notice on several grounds, among them if one of its payment providers asks, on suspected fraud, or when Paddle decides "in its sole discretion" that a product's chargeback rate is excessive or that a product falls outside its Acceptable Use Policy (clause 16.3). Either side can also end it on 30 days' notice (16.1).5
- What happens to the balance
- On termination Paddle "may retain any Supplier Fees as it reasonably determines necessary" to cover outstanding liabilities, future chargebacks and refunds, including refunds for subscriptions that run past the termination date (17.2).5
- When the contract says it comes back
- "On or before the later of (a) six months from the date of termination, or (b) the expiry of the last Product subscription", minus "any relevant deductions" (17.4). On our reading, a seller with yearly subscriptions still running can wait longer than six months.5 Six months is where the 180-day figure sellers describe comes from. It is the limit on the balance left when Paddle ends the agreement, not on ordinary payouts: while the account is open, Paddle pays once a month and "sellers cannot withdraw their balance on demand".9
Paddle against the other companies in this record
14 of the 34 Paddle cases here say Paddle told them six months or 180 days. The table sets that against every other company with 20 or more cases in the record: how many were still waiting when the merchant last wrote, the median amount they say was held, and the periods they say they were quoted.
| Company | Cases | Still held when last heard | Median amount stated | Told six months or 180 days | Told 120 days | Told 90 days |
|---|---|---|---|---|---|---|
| Paddle | 34 | 30 of 34 | $2,200 | 14 of 34 | 0 of 34 | 5 of 34 |
| Stripe | 520 | 458 of 520 | $4,909 | 11 of 520 | 69 of 520 | 11 of 520 |
| PayPal | 413 | 390 of 413 | $705 | 180 of 413 | 14 of 413 | 2 of 413 |
| Venmo | 180 | 174 of 180 | $200 | 17 of 180 | 0 of 180 | 0 of 180 |
| Shopify Payments | 140 | 105 of 140 | $7,000 | 1 of 140 | 37 of 140 | 4 of 140 |
| Square | 117 | 104 of 117 | $2,500 | 4 of 117 | 2 of 117 | 26 of 117 |
| Wise | 105 | 98 of 105 | $1,900 | 0 of 105 | 0 of 105 | 0 of 105 |
| Payoneer | 98 | 72 of 98 | $1,760 | 5 of 98 | 0 of 98 | 0 of 98 |
| Skrill | 53 | 49 of 53 | $129 | 0 of 53 | 0 of 53 | 0 of 53 |
| Airwallex | 46 | 44 of 46 | $5,165 | 12 of 46 | 0 of 46 | 1 of 46 |
| Cash App | 43 | 42 of 43 | $256 | 0 of 43 | 0 of 43 | 0 of 43 |
| SumUp | 39 | 33 of 39 | None stated | 0 of 39 | 0 of 39 | 0 of 39 |
| 2Checkout | 23 | 18 of 23 | $647 | 7 of 23 | 0 of 23 | 1 of 23 |
| Eventbrite | 22 | 18 of 22 | $1,100 | 0 of 22 | 0 of 22 | 0 of 22 |
The rows count what is on the public record, not a rate among each company's customers: a company whose public complaint channels are busier shows more cases, and the sources differ (most PayPal, Stripe and Square cases come from the Consumer Financial Protection Bureau's complaint database, most Paddle cases from Trustpilot and the Better Business Bureau). "Told" is the period the merchant says the company gave them, in their own words, not a term of service; a case that names two periods counts in both rows. "Still held" counts silence as well as money that never came back. Every case, with its public source, is on the record, and the same counts with their rules are on the data page.
1. The regulatory record
- Respondents
- Paddle.com Market Limited (UK) and Paddle.com, Inc. (US)
- Monetary judgment
- $5,000,000
- Statutes cited
- The FTC Act, the Telemarketing Sales Rule, and the Restore Online Shoppers' Confidence Act
- Permanent bans imposed
- Processing payments for tech-support merchants that use telemarketing or pop-up messages about computer security or performance; assisting deceptive merchants; and using tactics to avoid fraud and risk-monitoring programmes
- Allegation most relevant to cardholders
- Charging consumers for automatically renewing subscriptions without clearly disclosing the recurring charge
- Allegation most relevant to merchants
- Opening merchant accounts under false pretences as a "merchant of record" or software reseller, and using them to process payments for numerous unrelated third-party merchants
2. The public review record
Paddle's Trustpilot profile carried 11,090 reviews at an overall score of 3.9 out of 5, of which 21% were rated one star — roughly 2,300 reviews — with 73% at five stars and under 1% each at two and three stars. 2
That distribution is worth reading carefully rather than as a score. A 3.9 average built from 73% five-star and 21% one-star is not a mediocre product; it is two different populations having two different experiences. Sampling the one-star reviews directly, the visible majority are cardholders describing subscriptions they could not cancel and charges they could not identify. 3
Merchants are the smaller and quieter group, because a merchant with a frozen balance is usually still hoping to be paid and is disinclined to attack the company holding the money in public until the hold period has run out.
Capterra, a review site for business software, listed 15 reviews of Paddle at 3.4 out of 5 in the copy the web archive saved on 18 January 2025; the live page shows our browser a bot check. Two of the 15 describe a seller account closed with the money held. A software company’s chief executive wrote on 5 December 2024 that Paddle closed the account after they earned $2,000, said it would hold the funds for 180 days, and had not released them after the 180 days. Another chief executive wrote on 23 May 2018 that the account was cancelled after one day of processing and that the funds, held “in theory for 90 days”, had not come by day 120. Both match, in nearly the same words and posted the same day or one day apart, Trustpilot reviews already in the record (HF-2026-1578 and HF-2026-1571), so neither is counted again. Someone reading several review sites can meet the same seller more than once.8
3. What happens when Paddle closes a merchant account
This is the part of the arrangement that is hardest to find out before you sign up, and it is the reason this site exists.
In the merchant-of-record model the customer's money is legally Paddle's, not the software company's, until it is paid out. If Paddle terminates the relationship, the balance does not revert to the merchant automatically. Merchants report being told the balance will be held for a fixed period before release.
The documented record on this site has 34 cases that meet the verification standard. Twenty-one of them come from Paddle’s Trustpilot page, read on 13 October 2026: we searched its reviews for the words sellers use (payout, held, withheld, terminated, balance, reserve, 180 days and others), read the 400 reviews those searches returned, and kept the 21 written by sellers that give an amount, a stated hold period or a date. Each is the reviewer’s own account, not our finding.4
Three more come from Paddle’s page at the Better Business Bureau, which showed 155 complaints from the last three years when we read it on 19 October 2026. We could read the text of 131, almost all of them from buyers who could not cancel or get a refund; three are from sellers whose accounts were closed with the money kept: one on 26 July 2024, one on 15 August 2024 ($2,200 in dispute) and one in September 2023 (told six months). None of the three says the money was later paid. Paddle’s reply of 5 May 2025 to the first seller reads, in part: “I wasn’t able to locate any matching transactions linked to your email address”; the seller answered that it was automated and did not address the withholding.6
One comes from a Hacker News comment of 10 August 2025. The founder of GoStudio.ai wrote that Paddle froze the account during a quarterly review, citing a mismatch between his legal name and their records; that checkout was down for 48 hours while he moved payments to another provider; and that Paddle told him payouts would resume after 180 days but released the money “within a week”. It is the only released case on file where the seller says a stated 180-day period was cut short. The comment also promotes the provider he moved to, which we note and do not count as evidence either way.10
Eight more come from Reddit posts and a comment, read in a web browser on 21 and 23 October 2026. A seller of two products wrote on 12 September 2024 that Paddle would close the account on 18 September and, “based on the amount of risk associated with your account”, hold payouts not yet released for 90 days. A commenter wrote on 8 December 2024 of waiting seven months for an $11,500 payout. A software seller wrote on 13 May 2026 that Paddle had closed the account and would hold payouts for at least 90 days, extended by 30 days for any chargeback; their later posts say Paddle’s support confirmed on 20 May that a payout was released and then closed the account anyway, so we record that case as unclear rather than held. And a solo founder wrote on 7 August 2026 that roughly $10,000 had been withheld for about two months, with no answer to email and no dashboard access. The four read on 23 October 2026 are these. On 3 January 2026 a seller who says they have sold through Paddle since 2021 posted twice, eight minutes apart, that Paddle closed the account after a risk review with no reason given and had still not paid out after “over 200 DAYS” in one post and “280+ days” in the other; replies in the thread question the story, and the poster did not name the product. On 4 June 2026 a developer wrote that the account was suspended without a reason after about $200 in revenue, the day they asked for it to be paid out. On 19 September 2026 a seller wrote that Paddle blocked the account two days after approving it, with about $1000 in sales; on 17 October the same seller wrote that Paddle had sent the withheld money, and that Paddle had since charged recurring memberships of customers who signed up before the closure, which we could not check. And a seller wrote on 17 February 2026 that a first payout was on hold for “additional checks”, a reply of 9 February from Paddle’s sellers support quoted in the post, and that the money arrived on 19 February after, in their words, someone associated with Paddle intervened rather than through the sellers address.7
Other Reddit posts are not in the count because they give no amount, no period and no closure date. On 6 and 7 September 2024, two sellers on r/SaaS wrote that Paddle had closed their accounts without a reason, one adding that “Many other SaaS founders” had the same closure in the previous 24 hours. Two posts from 2026 say the same of an account closed after five years and one closed after three months; the writers say they are waiting for or may not receive a payout. None says how much or since when. They show that a closure without an explanation is something sellers describe repeatedly, not how many are still waiting.7
One more Reddit post is left out for a different reason. On 22 June 2024 a seller on r/SaaS wrote that Paddle closed the account, promised to release the funds after holding them for six months, had still not released them after nine, and did not answer when asked for the clause that allowed it. That is the same sequence and timing as the third BBB complaint above (closed in September 2023, told six months, asked for the agreement and got no answer). The post gives no amount and no product, so we cannot tell whether it is the same seller, and it is not counted a second time.7
In those 21 Trustpilot reviews, the hold periods the sellers say Paddle gave them are 30, 60, 90 and 180 days, and six months; eight say 180 days. Ten say the period or the promised release date had already passed without the money being paid. One business says that four months into a 180-day hold, Paddle told it the balance would be withheld outright and its past customers refunded. None of the 21 says the money was later paid. The search is a sample: a review that uses none of those words was not read.
Across all 34 cases — Trustpilot, Better Business Bureau, Reddit, Hacker News and one report sent to this site — 14 sellers mention six months or 180 days: 10 say 180 days, 4 say six months, and a case that says both counts once in the total and once in each row. 30 of the 34 were still held when the seller last wrote, and 3 say the money came back. This is what those sellers say they were told, counted from the record when the site is built:
| Stated period | Cases | Counting rule |
|---|---|---|
| 180 days | 10 of 34 | the field contains the number 180 |
| Six months | 4 of 34 | the field contains “six months” or “6 months” |
| 90 days | 5 of 34 | the field contains the number 90 |
| 60 days | 1 of 34 | the field contains the number 60 |
| 30 days | 2 of 34 | the field contains the number 30 |
| No period given | 12 of 34 | the field begins “None”, “No ” or “Not stated” |
Those are the sellers' words, not a published policy. The only written limit is the one quoted above: six months from termination, or the expiry of the last subscription if that is later.5
Read the incident record →
The Stripe file: the same question asked of a different company →
The Lemon Squeezy file, with Paddle, Stripe and Lemon Squeezy terms side by side →
File your own case →
4. If you are deciding whether to use them
This site does not tell you which payment provider to use, and nobody has paid for a mention on it. The only thing worth extracting from the file above is the question to put to any merchant-of-record provider before you integrate it, in writing:
If you close my account, exactly how long do you hold the balance, what triggers the hold being extended, and what is the written process for me to get the money at the end of it?
Keep the answer. If the answer is a link to terms that reserve the right to decide later, you now know what you are agreeing to, which is more than most people know when they sign.
Sources
- US Federal Trade Commission, press release of 16 June 2025, and the stipulated final order filed in the same action. ftc.gov. Retrieved 7 September 2026. Detail on the settlement page.
- Trustpilot, public review profile for paddle.com, trustpilot.com/review/paddle.com. Distribution as published on 7 September 2026. Trustpilot scores change continuously; the figures above are a snapshot on that date and are not updated automatically.
- Trustpilot, one-star reviews for paddle.com, first page as published on 7 September 2026. Characterisation of the visible sample only, not a statistical analysis of all 1-star reviews.
- Trustpilot, reviews for paddle.com found with its review search, and each kept review’s own page, read in a web browser on 13 October 2026. Every kept review is linked from its entry in the incident record (HF-2026-1571 to HF-2026-1591). The web archive could not save Trustpilot pages that day.
- Paddle, Master Services Agreement, "Last updated: 6 October 2026", clauses 16 and 17, paddle.com/legal/terms. Read on 19 October 2026; archived copy of that day. The agreement says changes take effect for existing sellers 30 days after publication; an account closed before then may be under an earlier version.
- Better Business Bureau, complaints page for Paddle.com Inc., Astoria, NY, pages 1 to 14 read in a web browser on 19 October 2026: complaint #23225935 (page 10), #23080324 (page 10) and #22127598 (page 12), kept in the incident record as HF-2026-1751 to HF-2026-1753. The page lists newest first, so complaints move to later pages as new ones arrive. bbb.org. The web archive could not save BBB pages that day (520).
- Reddit, read in a web browser on 21 October 2026 (the last four entries on 23 October 2026): r/Entrepreneur 1ff05kt and r/SaaS 1fezg09 (12 September 2024; HF-2026-1756); a comment by Ok-Compote8268 in r/SaaS 1ggggda (8 December 2024; HF-2026-1757); r/SaaS 1tbnpm6 and r/startups 1u1sgel (13 May and 10 June 2026; HF-2026-1755); r/paddle_com 1vhxwmb (7 August 2026; HF-2026-1758); r/SaaS 1q2nk6k and r/micro_saas 1q2nphl (3 January 2026; HF-2026-1763); r/SaaS 1twvpjm (4 June 2026; HF-2026-1764); r/SaaS 1wkvrvn and its update 1x8nxr9 (19 September and 17 October 2026; HF-2026-1765); r/SaaS 1r6tabb (17 and 19 February 2026; HF-2026-1766). Posts not counted, because they give no amount or period, or describe no closure or hold: r/SaaS 1faigyf (6 September 2024), 1fb2bv7 (7 September 2024), 1v4o4we (23 July 2026), 1whzvnu (16 September 2026), 1x3qohr (12 October 2026, money “hoarded”, no amount or period) and 1ua9rlf (19 June 2026, a first payout not processed for two months, no closure). The web archive answers Reddit with a bot-check page, so none could be archived. r/SaaS 1dm95em (22 June 2024), blocked to our browser on 27 October 2026 and read in the web archive’s copy of 6 March 2025.
- Capterra, reviews of Paddle, capterra.com/p/173382/Paddle/reviews, read on 27 October 2026 in the web archive’s copy of 18 January 2025 (the live page answered with a bot check): the reviews of 5 December 2024 (“Paddle will destroy your Sass!”) and 23 May 2018 (“Account disabled, fund lost”). The live page may now list more reviews than that copy.
- Paddle, Help Center, “When and how do I get paid?”, paddle.com/help/manage/get-paid/when-and-how-do-i-get-paid, read on 29 October 2026: archived copy of that day. Monthly payout schedule: the balance converts to a payout on the 1st and is sent by the 15th; “Sellers cannot withdraw their balance on demand.”
- Hacker News, comment by gostudio_ai of 10 August 2025, news.ycombinator.com/item?id=44857687, read on 26 September 2026: archived copy of that day. Kept in the incident record as HF-2026-0164.
Every factual claim on this page is sourced below. Last verified against primary sources on 31 October 2026.