Why has square kept my money with no explanation?

Agent00747 — Sat, 20 Sep 2025 19:26:25 GMT

I had a customer make a donation to my business using Square to help me and a financial hardship. Then all of a sudden Square decides to close my account and keep the money and tell me that I had until August 14 before I can get the money back. I tried to ask him. Why did they do that even after I sent them all the information they asked me for. Because of this, I don’t need my losing money, but I’m probably gonna lose my business and I sent them an email stating that and now they’ve added more time as if in retaliation

Re: Why has square kept my money with no explanation?

TheRealChipA — Tue, 18 Jun 2024 14:54:07 GMT

Hi @Agent00747. I’m sorry about your situation. I have a strong suspicion what happened, based upon your post.

First, while Square can be used to accept donations, those are strictly limited to organizations and non-profits that are actually incorporated to receive donations — ie - charitable organizations that are recognized as such. Yes, during the pandemic, Square was allowed by the card issuing companies to accept donations for most businesses, but that time has long passed and the old rules were reinstated.

Here’s a link to one of Square’s documents about business types and activities that might be disallowed. I’m including a screen shot of the part that I suspect tripped you up. Of course, I’m only guessing but your description in your post gives me a strong reason to believe what I do. You accepted money from a customer that was not for goods or services rendered. According to Square’s contracts with Visa, Mastercard, etc, they are not allowed to do this ever, and neither are we. Most likely one of those card companies flagged the transaction and required Square to act or they would lose the ability to process cards for all of us.

For the record, this is not just a restriction on Square. Processing any credit cards for “donations” is subject to strict rules and is severely limited to bona fide charitable organization, not for-profit ones. Using credit cards to move money around for anything other than sale of goods or services is not allowed because it is basically doing a cash advance on that card without paying the higher cash advance fees. If the amount gets high enough, such transactions can even be flagged as money laundering, subject to criminal penalties.

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Why has square kept my money with no explanation?

Re: Why has square kept my money with no explanation?