Sure they can.
Their cash flow model differs from other merchant service processors. Square holds potentially thousands of dollars for 30 days before delivery to the account holder. Every moment of that time they're earning interest. It's called playing the float, and some players in the space make most of their money on float interest.
Actually, if a merchant is "on reserve" and having their funds held, then the processor is required to keep the money in a non-interest bearing account. They don't make money on it. Reserves are to cover the processor's ass on chargebacks.
Comments
Sure they can. Their cash flow model differs from other merchant service processors. Square holds potentially thousands of dollars for 30 days before delivery to the account holder. Every moment of that time they're earning interest. It's called playing the float, and some players in the space make most of their money on float interest.
Actually, if a merchant is "on reserve" and having their funds held, then the processor is required to keep the money in a non-interest bearing account. They don't make money on it. Reserves are to cover the processor's ass on chargebacks.
While this might be a good business plan, this isn't what they say they do:
https://help.squareup.com/customer/portal/articles/11866-whe...
I've only done a few transactions with Square, and none took 30 days. Do you have experience to the contrary?