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Square can hold or delay transferring your money to your bank account if they decide there is a risk concern — they do not need to give you advance notice before doing this.
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 small businesses, having funds unexpectedly held can be devastating for cash flow, payroll, and day-to-day operations.
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.
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The discretionary fund-hold provision creates liquidity risk exposure for merchant clients and should be flagged in vendor due diligence assessments; the lack of advance notice and broad risk discretion standard may warrant review under CFPB unfair, deceptive, or abusive acts or practices (UDAAP) standards.
Regulatory citations, enforcement risk, and due diligence action items.
Provision-level monitoring, governance timelines, and regulatory mapping built from archived source documents and historical version tracking.
For small businesses, having funds unexpectedly held can be devastating for cash flow, payroll, and day-to-day operations.
No. ConductAtlas is an independent monitoring service. We are not affiliated with, endorsed by, or sponsored by Square.