Holding Your Breath: Stripe, Shopify & Square Reserves
and the Power of Local Sales Organizations
A message from Wissota Payments™, the Chippewa Valley’s Payment Consultants
Keeping your business afloat requires a smooth flow of cash. But what happens when major payment processors like Stripe, Shopify Payments, and Square put a hold on your funds? This newsletter dives into the world of payment processing reserves, explores the benefits of local Independent Sales Organizations (ISOs), and offers insights on how to navigate the financial tides.
The Reserve Ripple Effect
Stripe, Shopify Payments, and Square are popular payment gateways, offering convenient solutions for online businesses. However, these platforms have the power to hold your funds in reserve for months due to various reasons, including:
New Business: For startups, a reserve period is common while the processor assesses your risk profile.
High-Risk Industry: Certain industries, like e-cigarettes or adult products, are flagged for higher risk, leading to stricter reserve policies.
Chargeback History: A history of customer disputes can trigger reserve holds to safeguard the processor from potential losses.
Transaction Fluctuations: Significant spikes in sales volume might raise red flags, leading to temporary reserves.
These reserves can disrupt your cash flow, hindering your ability to pay bills, invest in inventory, or meet payroll. While these platforms offer options to expedite reserve release, the process can be complex and time-consuming.
The Local ISO Advantage
Independent Sales Organizations (ISOs) are regional payment processors who partner with merchants to offer tailored solutions. Here's how ISOs can empower your business:
Personalized Service: Local ISOs provide dedicated account managers who understand your industry and business needs. They can work with you to establish a transparent reserve policy and minimize hold times.
Faster Approvals: ISOs often have more flexible underwriting processes, leading to quicker account approval and potentially lower reserve requirements.
Industry Expertise: Many ISOs specialize in specific industries, offering valuable insights and risk mitigation strategies to minimize reserve triggers.
Negotiation Power: ISOs leverage their relationships with processors to negotiate lower fees and more favorable reserve terms for their merchants.
Local Support: With a local ISO, you get a dedicated contact who understands your businesses specific needs and can address your concerns promptly.
Choosing the Right Partner
Not all ISOs are created equal. Here are some key factors to consider when selecting an ISO partner:
Industry Experience: Choose an ISO with a proven track record in your industry.
Transparency: Ensure the ISO clearly outlines their fees, reserve policies, and dispute resolution procedures.
Technology: Select an ISO that offers a variety of robust payment processing platform with features like fraud prevention and recurring billing.
Customer Service: Prioritize ISOs with a reputation for excellent customer support to ensure you have a reliable point of contact.
Taking Control of Your Cash Flow
By understanding the mechanics of payment processing reserves and the value proposition of local ISOs, you can take control of your businesses financial well-being. Here are some additional tips:
Maintain a Positive Chargeback Ratio: A low chargeback rate demonstrates a healthy business model and reduces the risk of reserve holds.
Diversify Payment Methods: Offering multiple payment options, like ACH or Buy Now Pay Later, can minimize reliance on a single processor with strict reserve policies.
Build a Strong Relationship with Your Processor: Maintain open communication with your processor to understand their reserve policies and work towards mitigating reserve triggers.
By partnering with a local ISO and implementing these strategies, you can navigate the complexities of payment processing reserves and ensure a smoother flow of funds for your business. Remember, your financial success hinges on having the right tools and support in place. Don't let reserve holds hold you back.
Empower Your Business, Choose Local
Local ISOs offer a personalized approach, industry expertise, and the power to negotiate on your behalf. Take control of your cash flow and explore the benefits of partnering with your local ISO Wissota Payments powered by First Choice Merchant Services today.
Disclaimer: This newsletter is for informational purposes only and should not be considered financial advice.
Please consult with a payments professional for personalized guidance.
Prepared by Wissota Payments™ Owner/Consultant - Michael Lynch