Analyze payment processing terms for fund holds, rolling reserves, chargeback liability, and account termination clauses that can freeze your business cash flow.
Built by Sergei Tokmakov, California-licensed attorney.
Payment processors can hold your funds, demand reserves, and terminate accounts with minimal notice. These provisions have bankrupted otherwise healthy businesses.
Processors can hold 5-10% of your revenue in reserve for 90-180 days to cover potential chargebacks. This significantly impacts cash flow, especially for new businesses.
Vague "suspicious activity" triggers can freeze all your funds indefinitely. Review periods can last months with no clear timeline for resolution.
You're liable for full chargeback amounts plus fees ($15-25 each), even for fraudulent transactions. High chargeback rates can trigger account termination.
Processors can terminate accounts immediately for "any reason" and hold funds for 90-180 days post-termination. Getting blacklisted can make finding a new processor difficult.
You may be responsible for PCI compliance fines ($5,000-100,000/month) even when using the processor's hosted payment pages if there's any breach.
Processing above stated limits without prior approval can trigger holds or termination. Rapid growth can actually harm your account standing.
Common terms in payment processor agreements affecting your merchant rights.
Disputes resolved through private arbitration.
Cannot join group lawsuits over processor issues.
Per-transaction fees, monthly fees, and hidden costs.
Cardholder data handling requirements.
Processing rates can increase with notice.
Processor liability capped at fees paid.
Restricted business types and products.
Visa/Mastercard rules incorporated by reference.
Paste terms of service below to identify potentially problematic clauses.
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