Why does square hold every single payment that is made to me

[JDLTALCO24]

I have been using Square for a few months now, every time I get paid by a customer for a service I provided, Square holds the money, sometimes for days at a time. Whenever I talk to somebody at support center I get told the same thing, that it won’t happen every time, we don’t know why it keeps happening to you, blah blah blah. I’ve had 11 invoices paid by customers through Square, and Square has held every single one of them. I’ve provided any and all documentation and verification I have ever been asked from Square and yet the problem continues. 

[JK_Fiber_Art]

There's not really one good definitive answer as to why your funds are held.   Keep in mind that the volunteer Community Members are not the same as Customer or Tech Support as no one here can look at someone's account setup or history.  Best we can do is toss out some possible reasons.  (Square does use system automated algorithms to scan for issues - how these work is beyond our knowledge which may explain why even the Customer Supports Reps don't have a clue.)

Type of Items or Products Sold
Type of Services Offered
Unusual activity on your Square account
Account not completely setup - missing info
Keyed (card-not-present) processing limits
An unexpected rise in transactions
A spike in chargebacks

I'm sure there are more reasons - perhaps some other Community Members can help out.

[JDLTALCO24]

Thank you for your response. I understand that it is an automated system  that flags the transactions it deems suspicious or suspects fraud, but I’ve talked to over 25 people at Square and have been told every time that they don’t see anything unusual or missing on my account. The thing I’m most frustrated about is how I keep getting told that it won’t happen with every payment that gets made to me but so far it has happened to every single payment I’ve received, which has caused significantly negative impacts on my business not being able to access funds for up to 4-5 days after they’ve been paid to me. I’ve lost jobs, customers, had to issue refunds for deposits due to not being able to start and or complete jobs in the time frame promised, and now my current situation has my facing legal consequences from vendors and sub contractors I owe money to and can’t pay due to square holding my funds. It’s not little amounts they’re holding either, several payments they have/are holding a few thousand dollars. And basically all I get from anybody at Square is “oh well sucks for you” responses. 

[TempleCare]

We are a new medical practice and this is happening to us too. Insane

[Yuriv]

I am in management consulting. I provided detailed information to square, including communication with clients, invoices, account statements from my bank, and I get tortured and flagged with every invoice.  I don’t think I can use square.  

[FCGLLC]

Someone needs to start a class action lawsuit on square. Same thing holding money that cleared a customers account that is meant for me to be buying materials to do a job. All the customer sees is that the money cleared their bank account immediately upon depositing the check and which makes it look like I stole their money which I most certainly did not. This has to be illegal. If not square should be shut down immediately from being usable for negligence and bad business. They do nothing good for business owners. 

[Inksplashdesign]

They do this on Etsy but it's only 90 days and pretty standard. Just to ensure there is no chargebacks and if there is it's not negative balance. 

[Somuchfail]

Because they re-invest your money in the 'market', and they have the ability to do so without being sued.

[Somuchfail]

They're holding our money to reinvest those funds and flip them. Racketeering 101. We should start a payment processing company instead of funding these skimming leeches.