WHY BANKS IMPLEMENT HOLDS AND FREEZE ACCOUNTS AND HOW PROTECTING YOUR CASH FLOW FROM THEM CAN BE EASY
Protecting your cash flow is easy! You just need to understand the following:
Merchant Account Providers legally have the ability to hold your money and freeze or close your merchant accounts without notice and without cause. During an Economic Crisis, they have an additional cause. Which means you need a plan when it comes to protecting your cash flow.
In mid-March, 2020, one of the largest credit card processing companies in North America isolated FIFTEEN different industries and started holding 10% of their money moving forward.
The reason that they do this is due to the 6 month time period that consumers have to dispute charges. Disputes result in chargebacks that the merchant is ultimately responsible for. However, if the merchant’s business closes down, they are no longer available to pay chargebacks so the liability falls to the merchant account provider. To preemptively avoid this, providers close accounts that they think will become too risky or they freeze accounts and implement holds to ensure they will have the capital available to cover chargebacks.
Learn the steps you can take from our guide: Avoiding Merchant Account Issues When Banks Are Scared (by COVID19) – 2020
WHAT’S YOUR NEXT STEP?
If your business has been processing over $250,000 a year, you need to be working with the right banking partners. Let our team of Certified Payment Specialists support you by assessing your current situation.
Do you have the right providers? Do you have enough merchant accounts?
We want to make sure you’re working with providers that understand your model – and that your accounts are structured properly. Just complete our 10-minute application here, or call us at: (800) 805-4949
We are here to make your life easier. 🙂