I don't buy Paypal's explanation either. I can see placing the hold on *Really* new sellers, that have zero feedback, etc. In my case, they placed this "pending" status on my account when I had over 150 positive feedbacks on eBay, zero negatives, and a rating in all of those categories that was above whatever they were looking for.
Their rationale (I spoke with them on the phone) was that although I had had many more than 25 sales (which is their "newness" threshold), I hadn't yet had 25 sales to buyers in the UNITED STATES. So what? Their pending status wasn't just applied to payments from buyers in the UNITED STATES, it was applied to payments from buyers WORLDWIDE.
The good news, is that it DOES go away, eventually. In my case, I just isolated the reason for it (not having enough sales to US buyers), fixed it, and now the pending status is gone.
At any rate, I don't buy their stated rationale for a moment. I think this is MUCH more about implementing, effectively, a fee increase on new sellers, without saying so explicitly. They're holding your money for 21 days, without interest. If they invest your money at something conservative like 5%, then they're effectively making an extra 0.4% (or something close to that) on each payment, just by holding your funds for 21 days. Considering that Paypal charges ~2.9% fees normally, of which a good chunk goes to the expense of credit card processing, this extra 0.4% could mean a fairly substantial increase in their actual effective profit per transaction that it applies to.
), I sell 15 on Amazon, and 10 at web store. Math is pretty clear.
