Violations of law
Any business activity that breaks an applicable law or regulation cannot be run through PayPal.
Read the exact policy language
“violate any law, statute, ordinance or regulation.”
Published policy, quoted
As of 2026-08-07, PayPal's published terms name 23 business categories as prohibited and 18 as restricted. The full list is below, grouped by status, with the exact policy language for each category. PayPal's Acceptable Use Policy, last updated October 29, 2022, splits its rules into two tiers. A short Prohibited Activities list bans certain transactions outright, while a separate Activities Requiring Approval chart names 18 categories (gambling, prescription items, cryptocurrency, and others) that merchants may only offer after obtaining PayPal's pre-approval.
Source: Acceptable Use Policy, captured 2026-08-07. Lists change, and PayPal's live page controls.
The list
Any business activity that breaks an applicable law or regulation cannot be run through PayPal.
“violate any law, statute, ordinance or regulation.”
Sellers of narcotics, steroids, controlled substances, or products PayPal considers unsafe for consumers are banned outright.
“narcotics, steroids, certain controlled substances or other products that present a risk to consumer safety”
Products used to consume or prepare drugs, such as pipes and bongs, cannot be sold through PayPal.
“drug paraphernalia”
Cigarette sales are banned outright, while other tobacco products fall under a separate pre-approval category.
“cigarettes”
Products or content that help or teach people to break the law cannot be sold through PayPal.
“items that encourage, promote, facilitate or instruct others to engage in illegal activity”
Selling stolen property is banned, and the rule explicitly extends to digital and virtual items.
“stolen goods including digital and virtual goods”
Businesses that promote hate, violence, or discrimination, or that profit from a crime, are banned.
“the promotion of hate, violence, racial or other forms of intolerance that is discriminatory or the financial exploitation of a crime”
Items PayPal deems obscene cannot be sold, a standard the policy leaves to PayPal's judgment.
“items that are considered obscene”
Counterfeit merchandise and anything else that violates someone's copyright, trademark, or similar rights is banned.
“items that infringe or violate any copyright, trademark, right of publicity or privacy or any other proprietary right under the laws of any jurisdiction”
Some adult materials and services are banned outright, separate from the digital adult content that PayPal handles through pre-approval.
“certain sexually oriented materials or services”
Gun and ammo sellers, including sellers of certain parts and accessories, cannot use PayPal.
“ammunition, firearms, or certain firearm parts or accessories”
Weapons and knives that are regulated by law cannot be sold through PayPal.
“certain weapons or knives regulated under applicable law”
Selling or exposing other people's personal data in ways that break the law is banned.
“show the personal information of third parties in violation of applicable law”
Pyramid and ponzi structures are banned, and the rule reaches some multi-level marketing programs as well.
“support pyramid or ponzi schemes, matrix programs, other "get rich quick" schemes or certain multi-level marketing programs”
A group of financial arrangements including annuity purchases, lottery contracts, lay-away plans, off-shore banking, and refinancing credit card debt is banned.
“are associated with purchases of annuities or lottery contracts, lay-away systems, off-shore banking or transactions to finance or refinance debts funded by a credit card”
Selling certain goods you do not yet control or possess, a common issue for some pre-order and drop-ship models, is banned.
“are for the sale of certain items before the seller has control or possession of the item”
Acting as a payment processor that collects money for other merchants is banned, though a separate pre-approval path exists for licensed payment facilitators.
“are by payment processors to collect payments on behalf of merchants”
Selling traveler's checks or money orders through PayPal is banned.
“are associated with the sale of traveler's checks or money orders”
Currency exchange operations and check cashing businesses cannot use PayPal.
“involve currency exchanges or check cashing businesses”
Some credit repair firms, debt settlement services, credit transactions, and insurance activities are banned, with the word certain leaving the exact line to PayPal.
“involve certain credit repair, debt settlement services, credit transactions or insurance activities”
Payments made or received as bribes or for corrupt purposes are banned.
“involve offering or receiving payments for the purpose of bribery or corruption”
If a government agency has flagged a product or service type as likely fraudulent, PayPal bans it.
“involve the sales of products or services identified by government agencies to have a high likelihood of being fraudulent.”
Running any of the pre-approval categories without first getting PayPal's sign-off counts as a prohibited activity.
“relate to transactions involving any activity that requires pre-approval without having obtained said approval.”
Airlines and charter flight operators need PayPal's pre-approval before accepting payments.
“Airlines and scheduled or non-scheduled charters/jets/air taxi operators.”
Charities and non-profits must get pre-approval before collecting donations through PayPal.
“Collecting donations as a charity or non-profit organization.”
Dealers in jewels, precious metals, and stones need pre-approval before accepting payments.
“Operating as a dealer in jewels, precious metals and stones.”
Money service businesses, electronic money institutions, stored value card sellers, and escrow services need pre-approval.
“Providing payment services which would fall under the definition of a money service business or an electronic money institution. Services would also include the sale of stored value cards and escrow services.”
Brokers and platforms dealing in stocks, securities, forex, commodities, or other investment interests need pre-approval.
“Buying, selling, or brokering stocks, bonds, securities, options, figures, commodities, contracts for difference/forex, mutual funds or an investment interest in any entity or property.”
Gambling, betting, fantasy sports, lotteries, games of skill, and sweepstakes all need pre-approval, and only where both operator and customers are in jurisdictions that permit the activity.
“Activities involving gambling, gaming and/or any other activity with an entry fee and a prize, including, but not limited to property/real estate prizes, casino games, sports betting, horse or greyhound racing, fantasy sports, lottery tickets, other ventures that facilitate gambling, games of skill (whether or not legally defined as gambling) and sweepstakes”
Businesses dealing in cryptocurrency, in-game currencies, or NFTs need PayPal's pre-approval.
“Any digital representation of value that can be digitally traded, transferred, or used for payment, including, but not limited to, crypto currencies, virtual in-game currencies, or non-fungible tokens.”
Online pharmacies and anyone selling prescription products or dispensing services need pre-approval.
“The sale of any product(s) requiring a prescription or prescription dispensing services.”
Telemedicine and telehealth providers need PayPal's pre-approval before accepting payments.
“Providing medical services and consultations in a remote fashion.”
Digitally delivered adult content such as video on demand and web-cam services needs pre-approval, and PayPal warns it may be unable to process adult products in some jurisdictions.
“Any adult content delivered digitally including video on demand (VOD) and web-cam activities. PayPal may be restricted from processing payments in certain jurisdictions for adult DVD’s, magazines and other adult themed products or services.”
Dating services and apps need PayPal's pre-approval before accepting payments.
“Any dating services that enable individuals to find and introduce themselves to new people with the goal of developing a personal or romantic relationship.”
Live streaming and broadcasting platforms with user interaction need pre-approval.
“Any activities in which people transmit video, voice or text content in a live environment with the potential of user interaction.”
File sharing services and cyberlockers where uploads are public or uploaders get paid need pre-approval.
“Providing file sharing services including cyberlockers and similar remote digital file sharing services where uploaded content is accessible to the public or the service pays uploaders for content.”
Alcohol sellers need PayPal's pre-approval before accepting payments.
“Selling alcoholic beverages.”
Vape shops, e-cigarette sellers, and cigar merchants need pre-approval, while regular cigarettes are banned outright under the prohibited list.
“Non-cigarette tobacco products, e-cigarettes, cigars”
Medical device sellers and health-care providers, including medical tourism arrangements, need pre-approval.
“All items classified as medical devices, and all services or treatment provided by a person or organization holding itself out as a provider of health-care services”
MLM and direct-selling companies need pre-approval, separate from the pyramid schemes that are banned outright.
“Direct Sales Organizations (“DSOs”) and the Multi-Level Marketing (“MLMs”) are distribution and marketing models in which products or services are sold via a network of independent distributors or representatives.”
E-commerce marketplaces hosting third-party sellers need PayPal's pre-approval.
“A marketplace is an e-commerce solution where third-party sellers can sell their products or services to customers.”
Source: Acceptable Use Policy, captured 2026-08-07. A category not named above is not an approval. Processors decline high-risk merchants case by case.
Is your business on this list?
If PayPal names your category, these pages explain how the same category gets underwritten and approved instead.
Categorically rejected at signup? Get a processor that underwrites adult ecommerce.
Square declines firearms at signup. Get a gun-friendly online processor.
Processors decline credit repair categorically. Get CROA-aware underwriting.
Book now, travel later raises chargeback exposure. Get a processor that underwrites it.
Processors decline gambling on the MCC alone. Get underwriting built for placeable US models.
Stripe and PayPal decline crypto on sight. Get fiat acceptance underwritten for licensed MSBs.
Mainstream processors demand certification day one. Get pharmacy-aware underwriting.
Stripe shuts down prescription telehealth. Get a processor that underwrites it.
PACT Act complicates everything. Get vape-aware online underwriting.
FAQ
Not without sign-off first. PayPal's Acceptable Use Policy lists gambling, gaming, prize draws, and contests as activities requiring pre-approval, covering casino games, sports betting, fantasy sports, lottery tickets, games of skill, and sweepstakes. Even with approval, the policy limits these activities to operators and customers located exclusively in jurisdictions where they are permitted by law.
PayPal keeps a chart of 18 business categories it will only serve after reviewing and approving the merchant in advance. Using PayPal for one of these activities without that approval is itself a violation of the Prohibited Activities list. The policy directs merchants seeking pre-approval to contact PayPal's sales team.
The policy treats adult businesses two ways. Certain sexually oriented materials or services appear on the Prohibited Activities list, so they are banned outright. Digitally delivered adult content, such as video on demand and web-cam activities, falls under the Mature Audience Content pre-approval category instead, and PayPal notes it may be restricted from processing payments for adult products in some jurisdictions.
PayPal's Prohibited Activities list bars transactions involving ammunition, firearms, or certain firearm parts or accessories, along with certain weapons or knives regulated under applicable law. There is no pre-approval path for these categories in the published policy, so firearms sellers generally need a processor that accepts the industry.
The policy states that violating the Acceptable Use Policy constitutes a violation of the PayPal User Agreement, which is the contract governing your account. PayPal also encourages users to report suspected violations and offers a channel for asking whether a transaction type is allowed. Merchants in the listed categories often avoid disruption by working with a processor that accepts their industry from the start.
Keep looking
On the list?
Midnight Payments approves high-risk businesses with category-aware underwriting, low or no monthly fees, no long-term contracts, and daily ACH settlement. And if a shutdown already happened, a MATCH or TMF listing still has options.