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if more than $2,002 is charged within any rolling
Evidence is accumulating that a little seven-day period, the site reported. Additionally,
Square apparently utilizes a balky fraud model
luster has left the love affair between that has angered many pop-ups.
Square and its pop-up and micro "The system appears to flag a high number of
merchant customers, which may signal an legitimate transactions and can cause serious
opportunity for ISOs and MLSs to grab problems for some merchants," the site said.
"Numerous complaints have surfaced that
more business from the pop-up sector. Square has randomly and without explanation,
or notification, placed lengthy holds (exceeding
30 days) on their funds – even with swiped
transactions."
Daughton gave the example of a local shoe retailer who
could use the pop-up model to sponsor events in adjacent Square's policies can have a particularly negative impact
towns or ZIP codes. "You can come in to a town in Northern on organizations that host events. If event planners have
California in the Wine Country and put on a Jimmy Choo to wait 30 days until the Square-processed funds clear
Weekend Shoe Event and invite your customers that are and settle, vendors might have to be paid out-of-pocket,
shopping with you online. … And you can go up there with putting organizers in quite a bind.
a trailer load of shoes to a selected audience that loves your
product. As long as you can keep that information flow This situation is not restricted to events, of course. Few
going, you can have a heckuva little profitable business." small businesses can wait that long. "My clients can't really
afford from a cash flow perspective if 50 to 80 percent cash
Another type of pop-up installation revolves around flow is tied up through credit card payments and then
seasons or events. Hare said CPN enjoys a roster of pop-up not be settled for 30 days," said Cobrin. "There's some
merchants that are stable in that, though they don't process fundamental incongruities with a business that requires
with CPN year-round, they use the ISO year after year. In cash flow to buy new merchandise and pay employees."
the summertime, for example, people rent scooters, plan
travel excursions or lead river rafting parties. "You don't CPN, for one, employs next-day funding of merchant
necessarily need a business location with that," Hare said. accounts through American Express Co.'s OnePoint
"You just need to show up with your raft." program. "That's the one thing that consumers don't really
understand overall is the incredible power of a credit card
Other organizations "pop up" for charity events, such as art terminal and the fact that you've got banks backing all that
auctions and golf tournaments that raise money for special money somewhere," Hare said. "When a merchant gets
causes, for which CPN offers specialized contracts. Hare next-day funding, which we offer for a lot of people, that
has found that processing for these short-term events leads money didn't get there magically; it's a loan against the
to other opportunities. "Pop-up owners tend to belong to money that's going to show up."
clubs and associations of like-minded businesspeople, so
an endorsement from one can bring in business from a It's a pop-up world
whole group," he said.
The pop-up phenomenon has every sign of being more
Bursting the Square balloon than a passing fad; it appears to be an evolutionary
touchpoint as the entire payments ecosystem transitions
Square has been a balloon many professionals in the to a wireless marketplace. "It really bypasses legacy
payments industry have wanted to pop for some time. infrastructure entirely," Cobrin said. "You don't need
Evidence is accumulating that a little luster has left the love hardwired connections of terminals and processing
affair between Square and its pop-up and micro merchant platforms. There's a flexibility. And we're seeing a lot of
customers, which may signal an opportunity for ISOs and it in the MENA [Middle East and North Africa] region,
MLSs to grab more business from the pop-up sector. where they don't even have that option of the legacy telco
infrastructure."
In July 2013, CardPaymentOptions.com, an Austin, Texas-
based coalition of merchants and payment professionals Indeed, it may be that the pop-up movement in the
dedicated to reforming the industry, reviewed the business United States is playing catch-up to how merchants and
practices of Square. While the site praised the mobile consumers connect in the developing world. It seems that
payment pioneer for offering an easy-to-understand and outside the so-called first world, the rest of the planet is
accessible card processing solution, it gave the business already a complex matrix of pop-ups. "The model really
barely a passing grade on contract terms, and it flunked has logic for merchants," Cobrin said. "People are moving
the company when it came to customer service. around. People are in the field. They're remote and they
are where the transaction occurs."
To limit fraud, Square places holds on funds for 30 days

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