TL;DR: Square owed me thousands of dollars. They didn't pay me despite their written promise to do so, being past their own deadline, and several reminders on my part. They have offered no explanation. They also systematically lie about how long they hold their users’ money – evidence below.

Square is an American payment platform. You may have seen vendors use their physical checkout system. I used Square's online invoicing system to invoice my clients and receive payments. After a series of bad experiences with Square, I won't anymore, and I suggest you don't, either.

Square's invoicing system is simple: you add a client, send them an invoice, and they pay it online on a page hosted by Square. Square then receives the funds on your behalf and keeps a processing fee (2.9% plus $0.30 at the time of writing). After a few days, they automatically transfer the money to your linked bank account.

In early July, I changed my bank-account information. On July 10th, Square informed me they had placed a hold on my account on July 5th because they were worried somebody had gained unauthorized access. Payouts were frozen. Five days is an awfully long time to wait to inform users that their account may have been compromised.

I called Square immediately and asked what was going on. I let them know it was me who had changed my bank-account information. They said they were looking into it and informed me I'd be able to continue invoicing my clients, which I did.

The problem persisted about a week later, on July 18th. I contacted Square via their support chat and requested an update as well as access to my funds. Here's an excerpt from my chat with a rep named Mafer:

Mafer:

I’ve escalated this to the Square Secure Team for further investigation and they will be following up with you directly to assist in addressing your concerns. They will reach out to you directly as the Support Team does not have more insight into your account at this time.

Me:

“directly” meaning email?

Mafer:

That’s correct 😊

Me:

when

Mafer:

Should be in the next 48 hours

I did not hear from them within 48 hours. So I had to contact them again. This time I tried their online contact form and wrote on July 25th (excerpt):

A hold was placed on my account on 7/5 due to alleged suspicious activity.

I was only made aware of this on 7/10 and then called your support.

I followed up on 7/18 over chat requesting access to my funds and was told somebody would get back to me within 48 hours.

It's been a week since and I haven't heard from you. I have been patient. I demand immediate access to my funds.

The next day, on July 26th, I received an email from Square. They had sent it to an old email address I do not use to log in to Square anymore (!). They did not refer to my earlier communications. Instead, they informed me, again, that they had "detected some unusual activity on [my] Square account" and that they'd hold my funds. They also requested a call from me.

I called them the same day and spoke to another rep. She said they needed to call me on an old number; a number which I used many years ago to sign up for Square. I explained that I haven’t owned that number in years so I could not receive phone calls there.

She asked me to add my Google Voice number for 2FA. I did so. She said she will note that down and somebody will email me within 48 hours. She also said to call them if I don’t hear from them within that timeframe.

Nobody emailed me. On July 30th, I contacted their chat support again (can't call them on weekends). They apologized and said, again, that somebody would email me.

Then, on July 31st, I suddenly received an automated email informing me that payouts had been re-enabled. It contained no explanation, but at least I thought this ordeal was over.

However, the next day, on August 1st, I received an email saying payouts had been disabled again until I provide additional information about my business. Payouts had now been disabled for almost a month by this time.

Here's a quote from their email (bold in the original):

Right now, you can still continue to accept payments. However, until we can confirm your information, your funds will be held in your Square account. You will not be able to transfer your funds into your bank account and they will not be accessible on your Square Card.
Once we confirm your information, the funds will be released and available both for transfer and for use on Square Card.

That's manipulative. They count on the fact that most people will cave and provide the information under threat of not receiving their money.

Their email linked to a form. It was clear from the form that this time, the reason that payouts had been disabled was that a client of mine had repeatedly tried to use a card that didn't work. I guess that raised a red flag with Square.

I filled out the form and provided most of the requested information plus explanations. Some of the information, however, I was not willing to provide. For example, they asked for my three most recent bank statements. That's none of their business. They also asked for invoices that I had created using their system, meaning they already had those invoices, which seems lazy and unnecessary. Lastly, they asked how I made sure the card my client "presented to" me was legit, but that’s their responsibility as a payment provider; that’s what I pay them for. No card had ever been presented to me: it had been presented to Square, on their website. (Maybe they don't distinguish between vendors using their hardware to swipe cards and people like me who exclusively use their online payment system and never see any physical cards. Vendors can do things like check the signature on the back of a credit card, and they can ask to see an ID to check if the name matches that on the credit card; being online only, I can't do any of that.)

After I submitted their form, I received an automated email saying they’ll get back to me "within 2 business days". And: "[W]e will continue to hold the funds in your Square account and you will not be able to transfer them or use them on Square Card." (Bold in the original.)

The next day, on August 2nd, I received an email saying my account had been deactivated altogether, that the decision is final, and that I'd receive my funds after October 31st. Notably, they had not told me before sending me their form that I'd get my money even if I don't fill it out to their satisfaction.

To summarize: Square manipulates customers into providing information under threat of refusing payouts. In addition, their customer support was slow and unresponsive overall. They repeatedly promised that somebody would reach out within a certain timeframe and then broke those promises. I would not trust them with my money again, and you shouldn't, either.

If you know of a replacement payment processor, leave a comment below. PayPal once pulled a similarly manipulative stunt on me to get information (though not quite as bad), so I don't recommend using them, either. I suppose crypto currencies are an option but I don't know much about them and the volatile exchange rate is a risk.

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Update 2022-11-10

Their account-deactivation email from 2022-08-02 said that "[a]ny funds currently in your account balance will be held for a period of 90 days and released to you on October 31, 2022. They’ll be available in your bank account within 2 business days."

It is now 2022-11-10, so over a week past their own deadline, and I still have not received the funds.

I have waited over three months and Square owes me thousands of dollars.

I contacted them on 2022-11-06:

Your account-deactivation email from 2022-08-02 said that "Any funds currently in your account balance will be [...] released to you on October 31, 2022."

Today is 2022-11-06 and I have yet to receive those funds. Release them IMMEDIATELY. If you do not, I will pursue this matter relentlessly.

Dennis Hackethal

"Liz B." responded the next day:

Hi Dennis Charles,

After a comprehensive review of your account, we have determined that we are still unable to process payments for your business. Our decision to deactivate your account is final.

We understand that it can be frustrating to have your account deactivated. However, due to security concerns and the obligations of our agreements with card networks and other financial institutions, we cannot provide additional details.

For more information about our policies on this matter, please review sections 12 and 13 of our General Terms of Service.

Liz B.
Square Account Services

This is a non-answer because I did not request a reactivation of my account. I responded that same day:

Hi,

You phrase your email as if I had requested a reactivation of my account. I had not. I want a payout of the money in my account.

You owe me [amount]. You promised on 2022-08-02, in writing, that you would transfer that money on 2022-10-31. It is now 2022-11-07. You're a week late.

Transfer that amount to me immediately.

Dennis Hackethal

Her response:

Hi Dennis Charles,

After a comprehensive review of your account, we have determined that we are still unable to process payments for your business. Our decision to deactivate your account is final.

We understand that it can be frustrating to have your account deactivated. However, due to security concerns and the obligations of our agreements with card networks and other financial institutions, we cannot provide additional details.

For more information about our policies on this matter, please review sections 11 and 12 of our General Terms of Service.

Liz B.
Square Account Services

It's the exact same email, verbatim! Only the section numbers have changed. So the claim that they've performed a "comprehensive review" is a lie.

I figured "Liz B." isn't actually a person, but a robot.

I went online to try chatting with a customer rep. The button to do so was broken. So I called them instead and ended up speaking with Yvonne from ‘account services’. She assured me that humans respond to emails – which makes Liz's emails worse, IMO, not better. She also told me she needs to escalate this matter to their 'security team' and that I'd hear from them before noon the next day (i.e., 2022-11-08). It is now two days later and I have not heard from anyone. Given their unreliable nature, I doubt I ever will.

I will continue documenting their bad practices. I've also left a review on Google Maps, another one on Trustpilot, and another with the Better Business Bureau (which they need to approve manually so it doesn't show yet).

Square is a dishonest company and I cannot emphasize enough that you should avoid doing business with them.

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Update 2022-11-13

I have filed a complaint with the San Francisco district attorney (Square is headquartered in San Francisco) and also with the California Department of Consumer Affairs.

Separately, somebody reached out to me personally and wrote:

I can vouch for you Dennis. Recently signed up to square and after taking over $2500 in payments from customers square informed me they were suspending my account. They would not give a reason only stating that the money would be returned to me in 3months, that this decision would not be changed and that they are not required to give me any further details. I have reported them to ASIC and have been informed their is at least 1 class action law suit against square. Funnily enough I keep getting emails asking me to give them feedback and asking why I am not processing orders.

Somebody else pointed me to this site mentioning a lawsuit against Square over merchant payment holds:

This lawsuit, filed in California states that the company was fraudulent, negligent, and utilized unfair and deceptive actions with the merchant payment holds. It was alleged that Square tried to hold 30% of all plaintiff transactions without plaintiff’s authorization, something made worse by the fact that it was done during the covid-19 crisis. The company unilaterally instituted a 120-day hold on 30% of all transactions with very little warning and vague legal explanations as to why. There are also no terms included in the payment processing terms that address this issue giving Square no legal grounds for their actions.

The lawsuit is a couple of years old so some of that information may not apply.

Also check out the comments on this site. Here are just some of them that are similar or the same as my situation. Bold emphases mine. David Lauten wrote:

They waited till I had rec’d. 215.00 in payments, then said I was being reviewed. This isn’t even 2 days in. Then, I finally found a way to talk to a human on the phone, but alas it was a recording that knew me. They don’t want my business and I cannot transfer my money, nothing except issue refunds. I am not issuing refunds, people have all happily received their items. Meanwhile, square has my money, no time given when I can get it. All this with no complaints or chargebacks. I don’t get it.

Issuing refunds and collecting payment from the affected clients some other way only works if you have a good, ongoing relationship with them. I do, so I'm trying that route now. But it sucks because it's a hassle for them, too.

christine morinville wrote:

they kept $800 from me deactivated my account said I would receive my money in 90 days to my active open bank account that’s on file with them I have not received anything has been way over 90 days I can’t get a hold of anybody on the phone no email goes through to them I don’t know what to do I see advertising on line that they have in house by phone support or 24/7 email support or chat and I’m still not able to get a hold of anybody on the phone there’s no link that takes me to the live person all my emails are returned saying that it’s undeliverable to the address that’s provided they are still in my money I don’t know how to get it back and they closed my account I messed up my business I don’t know what to do I need help

Felicia M Simpson wrote:

I received a letter from Square saying that my account has been deactivated after the company that I work for deposited $2,220 on my Square account because I have a cleaning company and no one will respond no one get back with me not anything I’ve been calling and emailing but I get no response

Nick B Castellano wrote:

They have $5300 of my money. I have a garage door company. My transfers said suspended yet they let me take a payment of $4400 and now won’t give it to me.

Erik Tesluk wrote:

I took a $200 payment from my daughter and account wen went onder review, only to have it fully deactivated with an email 30+ days later telling me that Square could no longer fulfill my business needs. Also, it stated that my $200 would be released to
me 90 days after the deactivation (Release date of 10/18/21). Well, we are now 30+ days past that date, and I’m still pushing to get my money back. In the bright side, they have seemed a bit more responsive regarding this than they were my questioning the account deactivation… Bottom line is their customer service is absolute trash, if you need real-time support or a phone number to call for support, good luck… My advice is use anyone besides Square!

and Jamie M wrote:

I called and called, didn’t know they deactivated my account, I never got anything as to why I was deactivated and they still have my funds more than 90 days later.

There seems to be a pattern of Square holding funds for longer than the 90-day deadline they announce.

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Update 2022-11-13 2

I've found more evidence of the same pattern of Square withholding funds for longer than they say. From this site. Bold emphases again mine.

Star wrote:

My money been on hold for over 90 days now

TeiAndra Simmons wrote:

[S]quare is holding my funds for 30 days but will not reply to me through email or answer the phone for me. This is very devastating for me and my business.

She corrected herself:

*90 days!

And she followed up:

[I]t did take me about 6+ months to get my funds.

Rachel wrote:

Any sane person shouldn’t deal with square, cos they [...] ridiculously hold you up for 90 days and when you call after 90 days , they say additional 30 days…

Kacy Weaver wrote:

[W]e received and email say that they put our account on hold for 90 days and then we should receive our funds or we can refund to the customers. [...] 90 days came and no money, today is 120 days and still haven’t released our money. I’ve emailed the company atleast 20mins with screen shots and proof that our money hasn’t been transferred and they sent us a email in the 90th day saying they were going to release it but still didn’t. Customer service hung the phone up on me the one time I got through because they said they can’t answer my questions. I would love to find a attorney that would help us get our money back.

Kenneth B. wrote:

Square closed my account and took my money before I even made a sale. The money in my account was added from my other bank so I could buy things for my business and have a paper trail. They told me 90 days; it’s been over 5 months. When I contact them via email I don’t get a reply; [...].

Tara Bush wrote:

March 2022 I open Square checking account, deposited two $300 checks and did nothing else. They immediately deactivated my account and are holding my money. So far 90 days with a notice yesterday for an additional 90 days due to “recent chargebacks”. How can I have chargebacks when my account was deactivated right after I opened it? Has anyone found a class action lawsuit yet?

Square systematically lies about how long they hold their users' money.

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Update 2022-11-23

My client whose payments were being held illegitimately was kind enough to accept refunds and pay me another way. I've got my money now. I have no idea if Square ever actually refunded him.

As I pointed out above, refunding clients and asking them to pay another way only works if you have a good, ongoing relationship with them. Going this route worked in my case but it was a hassle both for my client and for me. It remains to be seen whether this put a strain on the relationship. For others, this route may not work, e.g. because they have one-off customers. Maybe they sell goods, have already delivered them (as David Lauten pointed out above), and don't really know their customers. Issuing refunds is a considerable risk for such vendors.

The SF district attorney hasn't gotten back to me. The California Department of Consumer Affairs has responded saying that "this is an issue that falls outside of DCA’s regulatory authority". But: "We suggest you contact the California Department of Financial Protection and Innovation (DFPI) which protects consumers and oversees financial service providers and products. DFPI supervises the operations of state-licensed financial institutions, including banks, credit unions and money transmitters."

I have filed a complaint with that department. I have also filed a complaint with the Better Business Bureau.

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Update 2022-11-23 2

Square just emailed me out of the blue saying they have reactivated my account and that I "will be able to continue processing [my] payments with Square".

After these awful experiences, I naturally have no interest in doing so, and I had not even requested that my account be reactivated. In addition, this email shows that their statement from 2022-08-02 about my account deactivation being final was another lie.

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Update 2022-12-01

My client tells me he was refunded.

A manager from Square, Anastasia "(she/her)", has reached out to me in response to my complaint with the Better Business Bureau, referring to Square's previous communication about having reinstated my account and implying that everything should be taken care of. Clearly she did not read my complaint carefully. I told her I never requested a reinstatement and asked her to comment on Square's pattern of lying to their users about how long Square will withhold their money.

The California Department of Financial Protection and Innovation has not even acknowledged my complaint with them.

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Update 2023-05-06

Earlier this year, I contacted the Idaho Department of Finance, which is the appropriate regulatory body in this matter.

As I predicted beforehand, they did not really care. One Norman Real reviewed my case as well as Square's response. He wrote to me:

[I]t appears that Block, Inc.’s actions in this matter were taken in good faith and in accordance with their Terms of Service. [...] Because Block, Inc. acted within the accordance of their Terms of Service and there is no balance due, the Department will consider this matter resolve [sic].

I asked him:

[T]o be clear, you don’t see an issue with Square having committed, in writing, to paying out money within 90 days, and then systematically violating that commitment with several customers?

The implication is that Square does not, in fact, act "in good faith".

He then quoted the section of Square's terms outlining their right to withhold funds. But I had never questioned that right. My complaint was about their not sticking to their own, self-imposed, and communicated deadline. I'm not sure Real ever fully understood that, and that a written communication from a business should mean something.

At the end of that response, Real implied that the case was closed. He evidently did not find it necessary to hold Square accountable for their lies. There wasn't even a slap on the wrist. The fact that I took steps to get my money some other way ended up helping Square's case because there was no balance due. That's a lesson learned for me.

As usual, one of the problems with government regulators is that, as institutions, they get paid either way so there's less of an incentive to hold bad actors accountable. They also have no competition in their respective jurisdiction.

I give up. I have done what I can to make light of Square's irresponsible business practices and will close the matter.