What To Do When Square Terminates Your Merchant Account

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Last Updated on June 16, 2023 by Corepay

In this article, we’ll explore the consequences of Square account termination and provide you with alternative options for high-risk merchants.

If you’re a high-risk merchant using Square to process credit card payments, your account might be frozen or terminated without warning. This can devastate your e-commerce store, primarily if you rely heavily on Square for payment processing.

When Square terminates your account, you’ll likely face several challenges, including losing your funds and the inability to process credit card payments. Square can also freeze your account indefinitely, leaving you without access to your money. This can significantly impact your business operations and lead to a decrease in sales.

However, there are steps you can take to mitigate the impact of Square account termination and find a more reliable payment processing solution. 

If you’re coming to this article after having your Square merchant account terminated, you’re in the right place. At Corepay, we specialize in high-risk merchant accounts and can board all verticals swiftly.

Key Takeaways

  •  High-risk merchants should consider finding a specialized credit card processing company to avoid sudden account deactivation by Square.
  • Merchants terminated or frozen with Square should immediately find a high-risk payment processor.
  • Corepay provides high-risk merchant accounts customized per business and verticals.
  • Merchant service providers like Corepay offer individualized services tailored to businesses, underwrite accounts before processing payments, and provide better customer service than payment service providers like Square.
  • If a Square account is terminated, businesses should check all bank accounts to ensure Square has returned held funds and process incomplete transactions using an alternative payment processing company.

What Happens When Your Square Merchant Account Is Terminated?

If Square terminates your merchant account, you may face an account closure with little warning, a 180-day hold on funds, and disputed transactions charged back and deducted from your remaining balance. This can be a major blow to your business, resulting in lost sales and revenue.

It’s important to take action immediately to minimize the impact of the account termination. The first step is to check your bank accounts to ensure that Square has returned any held funds. If you have incomplete transactions that Square didn’t process, you may need another payment provider to process these transactions.

While it’s unlikely that your account will be reopened, signing up for a new one may be possible. However, it’s important to address the issues that led to the account termination to avoid having the same problem with a new account.

To avoid the risk of sudden account deactivation, it’s recommended that high-risk merchants find a specialized credit card processing company. These companies offer customized high-risk merchant accounts tailored to individual businesses and verticals. They also provide more lenient terms and conditions and have a dedicated underwriting team to organize documents for the bank.

Corepay, for example, offers tailored services for businesses and can approve almost any business type with a 98% approval rating.

How Long Will Square Hold My Funds?

Once your Square account is terminated, you may wonder how long your funds will be held before they are returned to you. 

According to Square’s terms of service, they may hold your funds for up to 180 days to cover any potential disputes or chargebacks. 

This means you won’t have access to your funds during this time, which can significantly burden your business.

It’s important to note that Square may deduct any disputed transactions from your remaining balance, which can further impact your cash flow. To ensure that you receive your held funds as soon as possible, you should check all bank accounts to ensure that Square has returned the held funds.

Additionally, you can process incomplete transactions using another payment provider to minimize any further financial losses. Overall, it’s crucial to have a backup plan in case your Square account is terminated.

Finding a high-risk merchant account provider like Corepay can help you avoid sudden account deactivation and provide added security through underwriting before processing payments. By taking proactive measures, you can protect your business and ensure you have access to your funds when needed.

Will Square Reactivate My Account?

You may wonder if Square will reactivate your account, but unfortunately, there is no guarantee. Once terminated, Square may hold your funds for up to 180 days to cover potential disputes or chargebacks. Disputed transactions will be charged back and deducted from your remaining balance.

It is unlikely that your account will be reopened, but you may be able to sign up for a new one. However, Square may have already flagged your business as high-risk, making it difficult to find a payment processor willing to work with you. This is why high-risk merchants must find a specialized credit card processing company, like Corepay, that offers customized high-risk merchant accounts tailored to their business and vertical.

By finding an established payment processor who can organize your business information promptly, you can avoid sudden account deactivation and protect your sales. Payment processors who assist declined companies have more lenient terms and conditions, making it easier for high-risk merchants to accept card payments securely. 

What To Do Once Your Account Is Shutdown By Square

So, if your business suddenly loses its ability to accept card payments, don’t panic! You can take some immediate actions to recover and avoid further losses.

First, check all your bank accounts to ensure that Square has returned any held funds. If you have incomplete transactions, process them using another payment provider to minimize potential losses. 

Second, consider getting a high-risk merchant account with Corepay. This will help you avoid sudden account deactivation and provide added security through underwriting before processing payments.

Finding A High-Risk Credit Card Processing Partner

To ensure your high-risk business can accept card payments securely and avoid sudden account deactivation, finding a specialized credit card processing partner like Corepay is essential.

Corepay offers tailored services that are customized per business and vertical. This means we can provide a high-risk merchant account that meets your business’s unique needs, helping you avoid potential issues.

Square And CBD

While Square has launched a CBD program, seeking a high-risk payment processor familiar with the industry is wise.

The legality of selling CBD products has caused issues for some businesses using Square’s payment processing services. While CBD is legal in some states, the federal government still considers it a controlled substance.

Square’s terms of service prohibit the sale of any products that violate federal, state, or local laws, including CBD products. This has led to many CBD businesses being terminated by Square without warning.

Choose Corepay For Your High-Risk Merchant Account

We are confident that we can assist your business should you have gotten terminated by Square. We offer the following for our merchants at Corepay:

Competitive Processing Rates: Enjoy highly competitive processing fees that maximize profitability.

Swift Approval Times: Get quick approvals within 24-72 hours to secure sales promptly.

High-Volume Processing: Our proprietary payment gateway, Netvalve, handles substantial transaction volumes for high-risk companies.

Accept Multiple Currencies: Expand your reach and enhance customer convenience by accepting payments in various currencies.

Robust Security Measures: Rest easy, knowing your transactions are safeguarded 24/7 with our PCI-Level 1 secure payment gateway.

Mobile Payment Capabilities: Seamlessly accept payments from mobile devices, catering to modern consumer preferences.

No Hidden Fees: Experience transparency and simplicity with waived application, setup, and annual fees.

24/7 Customer Service: Our dedicated support team is available round-the-clock to assist with inquiries or concerns. Your satisfaction is our priority.

Wrapping Up

Now that you understand how Square handles terminating merchant accounts, we encourage you to fill out an application to find out how we can assist.

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