Beware the Square

When technology works, all is great in the world.  When it doesn’t, life can be miserable. In my case technology is a daily struggle. In the corporate world I was known for touching two keys on the keyboard and blowing up software programs. The IT folks both hated and loved me – I could help them debug any program almost instantly but when I called them for help it was usually a “special case” they’d never seen before.  I was their IT test dummy….!

Now that I own my own business, I don’t have an IT department. And life has really been miserable lately, especially when it comes to dealing with the technology of accepting credit cards. Here’s a question for you – do you ever wonder how those online credit card payment processors work?  And if you are a business accepting credit cards have you ever read the fine print of their merchant agreement?  The answer for me is yes to both questions, and I Still have had a major problem.

Here’s the quick and dirty – I used to use Square to accept credit cards. They were great, operative word “were,” until one of my old clients either got hacked or decided to dispute an old invoice. Then Square became a nightmare. Disputes work like this for Square: When a dispute is made the amount of the dispute is taken from your merchant account and frozen until the dispute is settled. If you don’t have enough money in the merchant account Square can take money out of your bank account.

Whaaaattt? Yes, you read correctly. Square can take the money from your bank account. It’s in the fine print.  In my case, they sent me notice there was a dispute, gave me instructions on how to respond to the dispute, and then processed an attempt to take money from both my Square account and my bank account.  All within 24 hours. I responded to their notices within an hour of receiving them, but Square did not even bother opening my response before trying to take the money. They did not seem to care that it was a fraudulent dispute – customer service was both uncaring and unhelpful. They wanted their money. Period.

This dispute started October 20. It is still on-going on December 5. Square is refusing to do anything even though my client has repeatedly told them the invoices are not disputed. I have had to find alternate ways of accepting payments and had to open a new bank account in order to continue operating. If you don’t think this can happen to you, think again! Square is one of the most unethical companies I’ve had the misfortune of working with.

Rarely do I tell people what to do – I’m a coach and facilitator. I help people determine what’s best for themselves!  In this case, though, as a service to anyone reading this blog, I will break my rule and tell you a few steps you can take to protect yourself.

1. Thoroughly research any payment processor you are considering using and read the fine print, particularly as it relates to the following:
   1. Dispute process – what do you need to do in case a customer disputes your invoice
   2. Withdrawal or transfer of money – does the service automatically send you the money or do you have to initiate the transfer manually
   3. Fees – they can vary depending on your volume of activity and can included hidden fees like statement fees or inactivity fees for not using the service
2. Talk to colleagues and peers about the service they use and get recommendations from them.
3. Consider having several payment processing options so that you’re not shut down if a dispute occurs.
4. Stay away from Square. There are better, more customer-centric options out there.

Good luck! And email me if you have other suggestions about accepting mobile or on-line payments!