Square Withholding up to 30% of Revenue from Some Merchants

Thousands of small businesses that are Square merchants are complaining that the company is holding back 20 to 30 percent of the money they collected from customers; this change came with little warning at an economically vulnerable time; Square has said they need to do this “to protect against risky transactions or customers who demanded their money back”; Square has said it has put reserves in place on only 0.3 percent of its millions of merchants, focusing on those sellers they deem to be most risky; this is a new practice for Square and it is the only payments company applying this practice beyond the industries that the lockdown hit particularly hard; the pandemic-induced recession has caused bigger challenges for Square than some of its rivals because Square is focused on those merchants with physical stores, many of which have been shutdown. The New York Times.

  • Peter Renton

    Peter Renton is the chairman and co-founder of Fintech Nexus, the world’s largest digital media company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series.