Jack Dorsey’s payment processor Square withholds 30% of payments during coronavirus pandemic

Twitter CEO Jack Dorsey’s other company, payment processing service Square, is withholding between 20 and 30 percent of the money that merchants receive from customers. One small business owner commented: “It may not be the coronavirus that puts us out of business but actually the greed of Square that breaks the camel’s back.”

(Article by Lucas Nolan republished from Breitbart.com)

The New York Times reports that Twitter CEO Jack Dorsey’s payment processing firm Square is under fire from merchants claiming that the service is withholding between 20 and 30 percent of the money that they receive from customers. Square is used by many small businesses to process credit card transactions, now many are claiming that Square is withholding up to 30 percent of their payments for the next four months.

Square reportedly told merchants that it was withholding a percentage of their payments in order to protect against risky transactions or customers who may demand their money back. However, several merchants have provided records showing that they have had no returns or risk flags.

Many small businesses claim that Square’s actions are placing them in financial difficulty at a time when many businesses are struggling due to the Wuhan coronavirus pandemic which has forced many businesses to fire staff, cancel expansion plans, and take out loans just to stay open.

Jesse Larsen, the owner of PennyWise Contracting, a construction company in Olympia, Washington, which uses Square as a payment processor commented: “It may not be the coronavirus that puts us out of business but actually the greed of Square that breaks the camel’s back.”

Larsen stated that Square had begun withholding 30 percent of each transition in early May, totaling thousands of dollars fo him. As a result, Larson was forced to put a hold on hiring new staff and sold a boat along with other personal property in order to keep the company running.

Square published a blog post explaining its new “rolling reserve” policy in which the company stated that it had begun withholding money late last year and expanded the practice after lockdowns due to the Wuhan coronavirus began across the world in an attempt to protect consumers against losses.

“We apply reserves on more ‘risky’ sellers, such as those that take prepayment for goods or services delivered at a future date, sell goods or services more prone to disputes, or operate in an industry that historically receives higher chargeback rates than others,” Square said in the post.

Richard Meldner, the publisher of eSellerCafe, an industry publication that wrote about Square’s withholding in May, commented: “Most companies are doing the opposite and trying to help small businesses. In all of this, Square is doing what the other companies did not.”

1,300 business owners have signed an online petition in the last month asking Square to end the practice of withholding payments. Read more at the New York Times here.

Read more at: Breitbart.com