First Wells Fargo Shutters All Personal Credit Lines, Now PayPal Terminates "Funds Now" Liquidity Program

Is there a liquidity crunch somewhere in the financial system? First, Wells Fargo announced it would be terminating all personal lines of credit within 60 days of its decision.

Now, customers of PayPal are reporting they’ve received letters that PayPal intends to terminate or already has terminated Funds Now access.

Funds Now was launched three years ago, allowing trusted sellers to access funds from completed sales often the same day. This was particularly useful to large eBay sellers, who use PayPal as a payment method and who prefer to be paid shortly after their auctioned products ship.

This isn’t an analysis site, only news, so we won’t ask if there is anything deeper to this apparent liquidity crunch. It could just be a coincidence that two large financial brands are suddenly discontinuing fairly core-to-their-business, and low risk credit extensions.

A PayPal user received this notice as PayPal suddenly rolls up its popular Funds Now service, which had provided same-day access to funds for some trusted sellers.

A reader pointed out to us that PayPal has also posted a policy stating it can hold users’ funds for up to 21 days now, although we are not sure if this policy is directly connected to the Funds Now retirement.