[PeterisP]

The alternative isn't "not dipping in working capital", the alternative is "freezing all received funds for a month, all the time".

Chargebacks happen; and you shouldn't expect that you will get paid for 100% of your sales. Deal with it or don't accept credit cards - the rules of the credit card game favor the cardholder a lot, that's why customers want to use their cards.

[guan]

The policy is clear, and based on other comments here probably mandated by the payment networks, but that doesn’t mean it’s reasonable.

It’s perfectly reasonable to expect merchants to be prepared for chargebacks and have a buffer for that. It would be reasonable to have a few days’ notice to pay the money, or be able to designate a different account for them to debit the amount from, or submit a credit card that Square can draw from as security.

But if you are expected to have a month’s sales in the Square-linked bank account all the time, how is that different from simply “freezing all received funds for a month, all the time”?

[aneth]

You are not expected to keep a month sales, just some small percent that will vary by your customer's tendencies to chargeback. Since almost every merchant account will have some chargebacks, and high volume ones will usually have some persistent level of funds in chargeback limbo, having some billing process to ask for funds is expensive and unnecessary. And what would happen when Jason refuses to find his account because he didn't agree with the chargeback?