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What to Do If Your Funds Are Held by Your Credit Card Processor

By Logan McAuliffe
 Posted February 26, 2025
 In Credit Card Processing, e-Commerce, High Risk Merchant Account, Security and PCI Compliance, Small Business Credit Card Processing
What to Do If Your Funds Are Held by Your Credit Card Processor2025-02-262025-02-25https://www.leappayments.com/wp-content/uploads/2019/09/leap-payments-logo-small-header.pngLeap Paymentshttps://www.leappayments.com/wp-content/uploads/2019/09/leap-payments-logo-small-header.png200px200px
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Picture this: You’ve made a slew of sales, your business is humming along, and then—you check your account, and the money’s not there. Your credit card processor has put a hold on your funds. For small business owners, especially those in high-risk industries like CBD or e-commerce, this scenario can feel like a gut punch. Cash flow is the lifeblood of your operation, and a delay can throw everything off. So, what do you do when your funds get stuck, and how can you protect yourself moving forward? Let’s walk through it.

Why Are Your Funds Being Held?

Processors don’t freeze funds just to mess with you—there’s usually a reason, even if it’s frustrating. Common triggers include:

  • High Chargeback Rates: Too many customer disputes can signal risk, prompting a hold to cover potential refunds.
  • Sudden Sales Spikes: A big jump in transactions might look suspicious, especially if it’s outside your norm.
  • Industry Risk: High-risk businesses—like travel agencies or subscription services—often face stricter scrutiny, leading to reserves or delays.
  • Terms of Service Flags: If your processor thinks you’ve veered outside their rules (e.g., selling restricted items), they might hold funds while investigating.

The problem? These holds can last days, weeks, or even months, leaving you scrambling to pay bills or suppliers.

Step 1: Understand the Hold

First, don’t panic—get clarity. Contact your processor immediately and ask:

  • Why are the funds held?
  • How much is on reserve, and for how long?
  • What documentation or steps do they need to release it?

Most providers have a support line or portal—use it. If the hold stems from chargebacks, gather proof of legitimate sales (receipts, tracking numbers). If it’s a risk issue, be ready to explain your business model. Knowledge is power here.

Step 2: Negotiate and Mitigate

Once you know the “why,” see if you can loosen the grip. Some processors might release funds faster if you:

  • Provide extra financial records (bank statements, tax returns).
  • Lower your risk profile (e.g., tighten refund policies to cut chargebacks).
  • Agree to a rolling reserve—where a percentage is held but released over time.

It’s not a guarantee, but showing cooperation can speed things up. Meanwhile, keep detailed records of every conversation—dates, names, promises—in case you need to escalate.

Step 3: Keep Your Business Running

While you’re sorting it out, don’t let the hold derail you. Dip into savings if you can, or lean on a short-term line of credit to cover gaps. Communicate with vendors if payments might lag—they’ll appreciate the heads-up. The goal is to buy time without losing momentum.

The Bigger Issue: You’re at Their Mercy

Here’s the tough truth: as long as you rely on a single processor, you’re vulnerable. Holds can happen again—randomly, without warning—and each time, it’s your business that takes the hit. High-risk merchants feel this sting the most, as processors often tighten the reins on industries they don’t fully understand. So, what’s the long-term fix?

Step 4: Get a Backup Merchant Account

A second merchant account isn’t just a safety net—it’s a lifeline. With a backup in place, you can:

  • Switch processing if your primary account freezes funds or shuts down.
  • Split transactions between accounts to spread risk and avoid red flags.
  • Keep cash flowing even during disputes or holds.

Think of it like insurance: you hope you never need it, but when you do, it’s a game-changer. For example, an online vape shop hit with a sudden $20,000 hold could pivot to their backup account, process sales, and stay afloat while fighting the freeze.

Why Leap Payments for Your Backup?

Not every processor is equipped to handle a second account seamlessly, especially for high-risk businesses. That’s where Leap Payments comes in. We’re built to support merchants who’ve been burned—offering:

  • Fast approvals, even for high-risk industries.
  • Transparent terms, so you know what to expect.
  • Flexible solutions to keep your cash flow steady.

Setting up a backup with us doesn’t mean ditching your primary processor—it means having options. And in a world where holds can strike out of nowhere, options are power.

Take Control of Your Cash Flow

Funds held by your processor don’t have to spell disaster. Act quickly to resolve the hold, shore up your operations, and—most importantly—plan ahead. A backup merchant account with Leap Payments can be the difference between a rough week and a ruined month. Curious how it works? Visit LeapPayments.com to explore how we can keep your business moving, no matter what comes your way. Because when it’s your money, you shouldn’t have to wait.

Contact Us Below & Secure Your Lifetime Rate Lock Today!

Or Call: (800) 993-6300

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account frozen, credit card processing hold, held funds, merchant account hold, processing hold, small biz processing
Logan McAuliffe
Logan McAuliffe
Merchant service expert, Logan McAuliffe, is a marketing writer for Leap Payments. His interests include playing sports, music and graphic design. Leap Payments is the industry leader in credit card processing and merchant services, offering both high-risk and traditional solutions.
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