My Recent Experience With Square

Generally speaking, the acquiring bank (working on behalf of Square, unless Square is a bank proper, I would presume they are just an ISO) takes all risk on a credit transaction, and then extends that risk back to the ISO, who then extends it back to the customer of the ISO.

The author's experience strikes me as naive, (which we all are on our first chargeback) but notably, yes, it is his requirement to have enough money in the account to cover any chargebacks he may receive. Depending on his volume, most ISOs and/or acquiring banks would require a healthy reserve as well, should they come and find his bank account dry after he just charged a bunch of people money and then went running to Mexico.

The fact that they contacted him -before- taking money out of his account is striking. The normal process is to deduct the money from your account, notify you, and then give you a period of time to respond. If you respond with sufficient evidence, the chargeback protection service clears it, the money is then re-desposited back to your account. The other party then has one more opportunity to dispute and the chargeback handler may decide that you're not going to provide any more viable of a defense, and simply give up - or may push back again, effectively ending the dispute. If the dispute doesn't end in your favor, the money is taken again. If you drained your bank account in the mean-time, you may find your ability to continue to process cards through that ISO, or that Acquirer has been terminated.

The truth is, for many years people have perfected scams on both sides of the card handling process, and these responses have been developed to minimize risk for the companies in the chain.

Don't you think this is an awesome opportunity for Square to explain to the author how charge backs work and why he should have money in his account? Perhaps if they used something other than cryptic replies they could help him understand the entire process and help make him even more of a Square advocate than he was before? That would be a HUGE differentiator from PayPal.

I would definitely say funding is for increasing customer service and trying to create as many advocates of your service as possible!

I agree with you completely. I was reading through the posting waiting for the "they did what!?" moment. I was ready to cast scorn on Square like I do regularly with PayPal. I got to the end was and think Square did a good job.

I didn't find any of the responses unprofessional. Not sure where the spammer accusation came from, they were just explaining how their ticketing system works.

The only thing to sort out is the response time. I would say any request for support on a payment issue is urgent. Even if it is a trivial issue like this. 6 hours would be far more acceptable than 24 though I guess there would be far higher cost to provide this service.

No. This screams of willing ignorance. You are dealing with money. Your customers money. You should have just a bit of respect to understand the agreements you are signing when dealing with your customers money.

Damn right you should understand the T&C BEFORE using the service like this. Doing otherwise is damn right irresponsible and shoddy. The people running into these problems have no idea what they are doing, they haven't dealt with real processing, and are blaming everything everyone but themselves.

Hell, even your comment is ignorant of the system that the customer agreed to use.

Guess what? Credit card users have certain rights, and if you want to accept credit cards, you have to play within those rules. This means chargebacks happen. This means you don't get paid. There are ways to reduce it, but you are still on the hook for it. Hell, even if the chargeback gets reversed, it's still held against you.

A shining example of this ignorant is right here:

> Square:We ruled in your favor,

That's not how chargebacks work. Square doesn't rule in any capacity. It's the banks. It's the client bank. Not Square. Not the merchant.

Every time a story like this pops up, we get a whole bunch of fools complaining and making reference to PayPal, and not a one of them has any clue as to the realities and reasons why.

And yes, I've done this. I've read the documents, and handled this. And it's always the same story. People whining about the company they deal with, when the reality is, the policy is in place to protect their customer.

Seems like both sides just needed to understand that there's a person at the other end of the email / support form. None of those emails really sounded like a person talking to another person. Imagine those notes as a transcript of an in person conversation rather than emails.

Sounds like Square can take care of their core business with decent competency, but as with many young companies, they may not have all the kinks worked out when something gets outside their normal decision tree.