Payment limits are restrictions that put a temporary cap on your ability to process transactions through your Square account. It’s important to note that Square doesn’t put limits on your payments because you’ve done anything wrong. In certain situations, we put limits in place to protect your account and the larger Square ecosystem from transactions that seem likely to result in payment disputes (which means financial loss for both of us – seller and Square alike).
Square doesn’t put payment limits in place lightly, because we know we’re putting a ceiling on the amount of business that 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, or 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.
We’ll send an email to your Square account if it’s necessary to put limits in place or adjust limits already in place. You can email Square to ask for more details or check in on how far you have progressed towards your limit – just respond to the original payment limit notice that we sent to your Square account.
A payment limit is applied by calendar period. Limits might be applied in a monthly, quarterly or annual time frame. Limits applied mid-period will apply to the entirety of that period. For example, if a monthly limit is applied on 15 June, then the amount processed between 1 June and 15 June will count towards the processing limit for the remainder of that month.
We’ll let you know whenever we make a change to your limits or remove them altogether. We periodically review your limits based on your processing history and on documentation that we request from you. To proactively request an increase to or removal of your limits, you can respond directly to the original payment limits notice that we sent to your Square account. You can also call us, but please have your customer code handy (you can find it in that same notice).
We’ll send you update emails when you’ve hit or exceeded 50% and 75% of the total limit for the calendar period, when there are 7 days left in that calendar period. You can also respond to the original payment limit notice or call the number above at any time to check in on how far you’ve progressed towards your limit.
This varies from account to account, depending on the type and size of your business and the kinds of transactions you process. It is possible for an account to have more than one limit restriction at one time.
How does this affect eCommerce payments?
If you exceed your payment limit, any additional transactions that your customers attempt will be declined. We recommend that you seek an alternate method of payment for any transactions that exceed these limit(s), such as a cheque or bank transfer.