I don't know anyone that got shut down "one time and done" but everyone I know that tried it got shut down eventually. I think the earliest was three times but most survived for longer than that. There is an old thread about it here somewhere. Look for Marathon Man's posts in that thread, his story rings true to me.
I have been wondering about this too. But I don't know about AZ and that is where I live. So what about AZ?
I believe AZ means Amazon Payments. I had a few large prepaid cards I paid someone with through AZ and it worked ok. Wouldn't do it over and over as you have to add a CCard to your account and they may be suspicious but it did work.
I have a small business, with two different paypal business accounts. I've paid myself from one account to the other for at least 5k worth of spend over 10+ different prepaid credit cards in the past few months. Haven't had any problems.
Well, one minor complication: paypal only allows you to add 15 credit cards per account (they say this is not their policy, but rather imposed upon them by the feds). So when I tried to add my 16th they wouldn't allow me. I called customer service, they said I could easily open up a secondary account which would attach to the one maxed out, then I could add another 15 and continue as before. I haven't bothered.
But point of the story is that paypal seems totally ok with one business account paying another, even if they are VERY CLEARLY owned by the same person. Really, I have a different business name and bank account for each, but have the exact same personal name, address and phone number. I'm willing to bet if you had one business account and one personal account, you also wouldn't run into problems.
oh, one more thought with paypal. If you're paying yourself, also send the payment as a 'gift,' this doesn't get you out of paypal fees, but it does exempt you from having to pay taxes on that money (paypal doesn't add gifts to your 1099).
For the folks that say we will get shut down, how do they know it's our credit card? I thought only the CC number and code at the back gets transmitted to them?
I don't know. My only experience is with Square and I got shut down within about a month of doing that. When it first came out, as you can imagine, a whole lot of folks here jumped on it and as a result there is a big thread from a year or so ago that describes posters experiences.