Is your merchant account holding funds?

Merchant Account Holding Funds

If your merchant account provider is holding funds, it’s likely they may soon freeze transactions and drop you as a payment provider. This can leave you in a place where you can no longer accept payments through your online store. In which case, you’ll need to find a high risk merchant account that you can get approved and open quickly without holding funds.

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How To Get Funds Released From Your Merchant Account

Having your revenue set aside and withheld by a financial institution feels like theft. Unfortunately, banks have the authority to dictate what happens to your money to a certain degree. But there’s hope. If you can show you’re operating a legal and sound business, then the bank won’t have the right to continuously withhold funds .

Walking through the process of releasing reserves and getting your income back in your pocket takes time and persistence. Banks have very little incentive to pay you back, and they’ll take their time in the name of due diligence. Knowing this, it’s important to follow these steps in order to expedite the process and get your money back from them.

Steps To Release Reserve Funds From Your Payment Processor

  1. Give Advanced Notice – If you know ahead of time you’ll want to dispute the withholding of funds, then be sure to give at least three months notice. The earlier you start the process, the faster you’ll see results.
  2. Review Your Reserve – The implication is that the money in question is your Reserve Account. Review your terms and conditions and find out what legal precedence you have to make demands.
  3. Stay Persistent – Waiting 5-10 business days is not a standard. Any amount of time your bank tells you is “policy” is often an arbitrary estimation, and is in place to allow them the lethargy they’d prefer. Don’t buy it, call in, send emails and be sure your file is constantly being addressed by their underwriting team.
  4. Seek Legal Action – If your merchant account provider continues to put your requests on the back burner, then it’s time to take legal action. Contact an attorney that specialize in merchant account case law and follow their recommendations. Businesses don’t like paying attorney fees and court costs, so once they receive a legal letter, they’ll pick up the pace when it comes to releasing your funds.
  5. Create Reviews Online – Outside of punitive legal charges, the internet serves as a great tool to leave feedback for others to see in a public forum. Google Business Profile has a star rating system that shows the most recent reviews customers have left. Combining public feedback on Google , BBB , Yelp , and Trustpilot can get your case in the spotlight in front of a public audience.

Closing Your Merchant Account

In some cases, the reason you’ll want your reserve funds returned is because you’re closing your merchant account and using another, or dissolving your business. Unfortunately, most merchant account agreements are written to withhold reserve funds after your business closes. They do this to prevent fraudulent companies from quickly setting up shop then closing down and taking customer’s money. However, once you have shown that there are no chargebacks coming in after your business closes, they’ll be able to review the final details of your account and return the final payments to your account.

Switching Merchant Accounts

Switching merchant providers can be hugely beneficial to any company who wants to save significant margins on their payment processing fees. After you’ve decided the best high risk merchant account for your business, you can ask them what they’re team suggests about transferring the reserve account. You may be able to get the same funds moved over without having to withdraw them in the first place.

Important Note: In no way does this article serve to give legal or financial advice. For any legal or financial consultancy, please seek out a profession attorney who can help you with your case.

Table of Contents

  • - How To Get Funds Released From Your Merchant Account
  • Steps To Release Reserve Funds From Your Payment Processor
  • - Closing Your Merchant Account
  • Switching Merchant Accounts
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