This is pretty standard, if a card processor thinks there is high probability of chargebacks then they will hold your funds for 3-4 months to make sure they can cover those chargebacks. After the deadline for cardholders to make disputes passes then they release the funds.
It might not be anything you did personally, it might be based on location or business type.
Talking to them is probably the best course of action though the front-line people won't be able to make a decision. I'd lookup their CEO's e-mail and send a short "I'm a small business and my funds are being held 120 days, please help" and that will usually get routed to someone who can make a decision.
This person's giving solid advice. In traditional payment networks, like swipers in a retail location, 30-90 days is standard, this varies by risk profile and SIC code, like comparing a deli to an ATM in an adult club. There's a lot of settlement and reconciliation and things that happen in the background.
Square started doing that with my business. Without warning or cause, they began withholding 20-percent of all incoming transactions in case of chargebacks. Makes me wonder if a regulatory change has occurred.
> Why is there never advance warning? It's the lack of courtesy that gets to me.
They give you advanced warning in the T&C. If they gave more warning, this could assist people who commit fraud. Fraud is not some imaginary issue. It's very real and very problematic.
I'll say it again, get your own merchant account if you don't like this.
> If they gave more warning, this could assist people who commit fraud.
Sorry, no. Their inability and/or incompetence at avoiding fraud without mysterious hidden "rules" (i.e., security through obscurity) is their problem.
It might not be anything you did personally, it might be based on location or business type.
Talking to them is probably the best course of action though the front-line people won't be able to make a decision. I'd lookup their CEO's e-mail and send a short "I'm a small business and my funds are being held 120 days, please help" and that will usually get routed to someone who can make a decision.