COVID-19 has put the global economy in a devastating situation. Refunds and chargebacks are growing. Businesses are being held back by up to 30-40% by many payment-processing companies. So, what’s going on? Who can help you with merchant-processing services such as CutPay services?
Holdbacks From Payment Processors: What About CutPay?
During the last few months, when payment processors were focused on collecting from merchants, the 2-3% rejection rate reached 50% and higher. The reason had to do with lost revenue as a result of COVID-19.
Payment-processing companies weren’t able to collect enough from their merchants that’d help them with covering interchange fees required by the card brands. Customers were requesting refunds from merchants at an unprecedented rate. A lot of cardholders even decided to bypass those requests and told their credit-card issuing companies to start the chargeback process.
This was the reason why Stripe and Square all of a sudden got down to taking extra holdbacks and reserves from merchants. If you’re concerned about the situation and need help with a payment processor like CutPay, turn to a respectable payment-processor comparison expert in the UK. With a true merchant-processor comparison specialist, you can find the most honest review of processors at the time of writing.
Businesses Facing Holdbacks From Processors
Credit-card processing companies let their customers know everything will be OK. However, many of them have already created problems for merchants in these challenging times.
PayPal Holdings Inc., Stripe Inc., Square Inc., as well as Worldpay are telling merchants to wait days/weeks to get access to the funds deposited in their accounts. As they note, they want to help merchants avoid possible losses when people having purchased airline tickets, vacation packages, and other goods/services require refunds.
Payments company Square has recently held back 20% – 30% of the amount the company collects from some customers, and the reason cited is the same: protection against risky transactions.
To wrap things up, because of COVID-19, small businesses are struggling to stay afloat. On top of this, payment processors such as Square, PayPal, etc., are holding back funds, thus creating even a harder situation for many more small businesses.
Author Bio: Payment industry guru Taylor Cole is a passionate payments expert who understands the complex world of merchant accounts and can best help you with CutPay services. He also writes non-fiction, on subjects ranging from personal finance to stocks to cryptopay. He enjoys eating pie on his backyard porch, as should all right-thinking people.