Square doesn’t put payment limits in place lightly, because we know we’re putting a ceiling on the amount of business you can bring in easily. It all comes back to your customers’ ability to dispute payments they’ve made to you – we’re trying to protect your business and our ecosystem from losing money when the customer’s bank rules that you have to return their money. Square makes this decision based on a number of different possible scenarios:
New to Square. If you’re new to Square and have a lack of processing history on your account, we may put a payment limit on your account until we know more about how you process payments.
High rate of payment disputes. If a lot of your customers are disputing their purchases and/or if you have insufficient funds to support/refund those disputes, we may put a limit in place until your rate of disputed payments goes down.
Erratic processing activity. Sudden changes in how many payments you’re taking within a given period, or the size of transactions you’re taking the velocity or volume of transactions on your Square account may result in a payment limit until a regular pattern re-establishes itself.
High-risk goods or services. We’ve found that some businesses sell products or services that are more prone to receiving payment disputes. We may put a payment limit on these kinds of businesses until we’ve established that they can maintain a low rate of payment disputes.