Square can freeze the money owed to you from sales for up to 90 days, or potentially longer, if it suspects fraud, elevated risk, or a policy violation. This decision is made at Square's discretion.
This analysis describes what Square's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
For merchants who rely on payment proceeds to cover daily operating costs, a fund hold of up to 90 days can create serious cash flow problems, especially if the hold is triggered by an automated risk flag rather than a confirmed violation.
Interpretive note: The phrase 'or longer in some circumstances' is not further defined in the document, leaving the maximum hold duration ambiguous and subject to Square's discretion.
The updated terms modify how arbitration disputes are resolved when 25 or more similar claims are brought against Square. Previously, Square's terms referenced 'Bellwether Arbitration procedures' under which test cases would be selected and remaining demands could proceed individually under standard rules if settlement failed. The updated framework establishes a mandatory mediation phase after initial arbitrations resolve, and requires remaining claims to proceed in batches of up to 100 rather than individually, with one arbitrator and consolidated fees per batch. This may reduce the procedural flexibility for claimants pursuing claims outside the initial test-case group, though the batch structure may reduce overall administrative costs. The terms now explicitly state that NAM shall administer batches concurrently and that parties will engage in a 'single global mediation' before batch proceedings commence.
View change record →Provision was renamed and now includes specific criteria (risk of loss, fraud, violation) and explicit 90-day hold duration language that was not present before.
View full change record →Merchants may find their sales proceeds frozen for up to 90 days without advance notice if Square determines there is a risk concern or policy issue with their account, which can directly disrupt business operations.
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"Square may, in its sole discretion, place a hold on any or all funds otherwise payable to you. We may hold funds where we believe there may be a risk of loss, fraud, or if we determine that your account is in violation of these terms. Holds may remain in place for up to 90 days or longer in some circumstances.Excerpt from Square's Terms of Service
REGULATORY LANDSCAPE: Fund-hold practices by payment facilitators are subject to oversight by the CFPB, particularly where merchants qualify as consumers under applicable law, and by state money transmission regulators.
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For merchants who rely on payment proceeds to cover daily operating costs, a fund hold of up to 90 days can create serious cash flow problems, especially if the hold is triggered by an automated risk flag rather than a confirmed violation.
Merchants may find their sales proceeds frozen for up to 90 days without advance notice if Square determines there is a risk concern or policy issue with their account, which can directly disrupt business operations.
ConductAtlas has identified this type of provision across 287 platforms. See the full comparison.
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