Merchant account frozen or closed without warning?
Send me the notice, and tell me what is being held.
In short
If your merchant account is frozen, your processor has usually stopped processing and paying out your sales while it reviews you, sometimes before saying why. Your agreement says when it may freeze or close the account, what notice you are owed, and what happens to money already in it. Save the notice and every message, and reply in writing.
What to do when your merchant account is frozen
Start by protecting the record. Keep the notice, your payout history and every message, and put your replies in writing. Download statements while you still have portal access. Then have the notice read against your agreement before you answer questions or sign anything new.
Why do processors freeze merchant accounts?
A processor can freeze an account on short notice, sometimes before it gives a reason, and the notice may say little. Processors often point to a rise in chargebacks or refunds, a jump in volume or ticket size, a change in what you sell, or missing identity documents. The real reason shapes what can be done.
Hold, freeze or termination: what is the difference?
Processors use these words loosely, and the notice may not say which one you face. The difference matters, because each leaves you with different rights under your agreement and different risks for your next account. This is how I use the terms:
| Can you keep processing? | Is money held? | Can it lead to MATCH? | |
|---|---|---|---|
| Hold on payouts | Usually yes | Some payouts | Not on its own |
| Freeze | Usually no | Sales sit unpaid during the review | Not on its own |
| Termination for cause | No | Often, through a reserve | Yes, it can |
Can a frozen account lead to a MATCH listing?
It can, if the freeze ends in a termination for cause. A for-cause termination is what can lead to a MATCH listing and a reserve. So the reason in the notice, and whether it amounts to cause, deserve a careful answer.
If that has already happened, see MATCH list removal and getting a rolling reserve released.
What I do when an account is frozen
My first job is to find out what the processor is doing, and whether your agreement allows it. Frozen accounts move fast, so I work from the documents: the notice, the agreement, your payout history and the processor’s own messages.
- Read the notice against your agreement: what reason was given, what notice was required, and whether it was followed.
- Pin down what is held, who holds it and for how long.
- Press for release of your funds and a written reason, and handle any MATCH listing or reserve that follows.
What to bring to the first call
A first call goes further when I can see the paperwork. These documents show what the processor said, what it is holding, and what your agreement allows. Send what you have; gaps are normal, and I can tell you what else would help.
- Your merchant processing agreement
- The freeze or termination notice
- Your payout history and twelve months of processing statements
- Your messages with the ISO, processor or acquiring bank
Common questions
Can I keep processing while my merchant account is frozen?
Usually not through that account. A hold on payouts may let you keep selling while some money is held, but a full freeze usually stops processing. The notice and your agreement say which applies.
Should I open a new merchant account?
Think before you do. A new acquirer will check MATCH and may ask about past terminations, so answer accurately. A new account does not settle what is owed on the old one.
How long can a processor hold my funds after a freeze?
Your agreement is the starting point, and agreements differ. Ask in writing for the expected release date, and keep the reply.
Should I answer the processor’s questions during a review?
Often yes, because silence can count against you. Answer in writing and accurately, after the notice and your agreement have been read.
Talk to me about it
Call me, or email the notice you received with a few lines on what is being held.