payment processing restrictions, suspension of the account, and even bans. Knowing all such prohibitions is required to ensure full Square terms of service compliance. This article talks about Square banned merchants, Square prohibited goods and services, Square unsupported business types, and  

Square prohibited business models and also describes the risks of Square terms of service violations and how businesses can navigate Square service agreement limitations.

Why Square Prohibits Certain Businesses?

Fintech businesses such as Square are bound by stringent banking regulations and card networks’ policies. Every transaction made through Square is backed by acquiring banks and card networks such as Visa, Mastercard, and American Express. These financial institutions require the following:

• AML policies
• CTF policies
• Fraud-prevention policies.

If Square were to allow high-risk businesses without restriction, it could face fines from card networks and regulators. It is because of this reason that Square terms of service prohibiting certain activities clearly define what business and transactions are not allowed. Moreover, the prohibition of some business models protects customers. For example, prohibition of unlicensed sales of medicines prevents unsafe medicines from entering the market. Similarly, limiting cryptocurrency transactions reduces fraud risks.

Square Prohibited Businesses

At the center of the boundaries are Square forbidden businesses. These are businesses Square will never do business with, either by location or regulatory approval.

A few examples include:

• Illegal activities – such as selling narcotics, selling human beings, or selling money laundering
• Counterfeiting sales – selling counterfeit designer clothing, software, or electronics
• Unlicensed gambling companies – operating online casinos without regulatory licenses
• Hate or violence-related groups – groups advocating for extremist behavior

Traders in these groups are subject to immediate account suspension for Square terms of service violations.

Square Restricted Industries

A few companies are not prohibited at all. Others are Square restricted industries, which are permissible only under conditions, surveillance, and verification.

These are:

• Cannabis, CBD, and hemp products – permissible only under state and federal law
• Firearms and ammunition sales – tightly monitored and often restricted to licensed groups
• Adult entertainment – permitted only where companies are in compliance with legal requirements for age verification
• Telemarketing and subscriptions – require additional approval due to higher chargebacks
• Debt collection agencies – permitted only if in compliance with fair debt collection practices

When merchants in the listed industries prohibit Square compliance guidelines, they risk Square payment processing restriction or account closure.

Square Banned Merchants

A Square banned merchant is a merchant whom Square has banned permanently from use based on repeated or egregious misbehaviors. Bans normally occur for merchants who:

• Attempt to hide their true business model
• Repeatedly execute Square forbidden transactions
• Sell Square forbidden products and services despite being warned
• Deliberately fail Square terms of service adherence

For example, a seller masquerading as a clothing store but actually selling counterfeit luxury watches would be marked and banned.

Square Prohibited Goods and Services

Even if a business model is acceptable, selling certain products is Square prohibited goods and services. These products cannot be sold using Square:

• Stolen products
• Counterfeit products
• Illegal drugs
• Unlicensed gambling services
• Certain weapons banned by law

These are just some of the limitations that are among Square terms of service exclusions to guarantee legality and protect consumers.

Square Unsupported Business Types

Some businesses are Square unsupported business models, i.e., too risky or outside the accepted industries of Square. They are:

• Payday lending companies
• Unlicensed crypto exchanges
• Multi-level marketing scams
• Internet pharmacies lacking verified licenses
• High-risk investment advisory services

These are Square banned business models and are designated for permanent exclusion.

Square Prohibited Transactions

Even if a company is legitimate, there are activities that constitute Square prohibited transactions. These are:

• Money laundering through another merchant’s account
• Processing payments on unsold goods
• Transmitting fake or forged transactions
• Making Square a peer-to-peer money transfer application

These processes are not only contraventions of Square payment processing contracts, but can also be contraventions of criminal laws.

Square Restricted Products

There are certain products that are marked as Square restricted products. They are sold only on rigid compliance programs. Examples include:

• Alcohol – must be licensed and age-verified rigorously
• CBD products – must comply with U.S. FDA and state laws
• Firearms – only allowed in licensed jurisdictions with permits
• Supplements and drugs – restricted if they are not FDA-approved

Failing to meet these criteria invokes Square payment processing limitations.

Square Prohibited Business Models

Certain business models are considered high-risk due to fraud or chargebacks. The Square prohibited business models include:

• Pyramid schemes
• Ponzi investment schemes
• Prepaid telephone card resale without a permit
• Timeshare resale businesses

Merchants within these models are typically held to Square terms of service restrictions and account suspensions.

Square Acceptable Use Policy

The Square acceptable use policy is the foundation of compliance. It outlines what is acceptable, what is restricted, and what is forbidden outright.

It includes:

• Approved industries
• Prohibited transactions
• Restricted products
• Merchant obligations

Merchants who violate this policy are held to Square service agreement restrictions, such as suspended payments or closed accounts.

Square Terms of Service Restrictions

Square terms of service restrictions go beyond prohibited items they impose limits on the application of Square’s services by businesses. Some of these include:

• Misrepresentation of industry category
• Merchant-to-merchant sale of accounts
• Using Square for non-business purposes of transactions
• Attempts to circumvent Square payment processing limits

All these are violations of Square terms of service restricted activities.

Square Compliance Guidelines

The Square compliance guidelines provide guidelines around identity verification, monitoring of transactions, and legal obligations. Some of these include:

• KYC (Know Your Customer) verifications
• Anti-money laundering policies
• PCI DSS compliance for secure card processing
• Age-restricted product verification

Merchants that do not comply with these terms are likely to have Square payment processing limitations.

Square Service Agreement Restrictions

The Square service agreement restrictions outline what Square is not guaranteeing. For example, Square:

• Does not guarantee acceptance of all business categories
• Is not liable for loss as a result of chargebacks
• Has the right to freeze funds if suspicious activity is found

Merchants must carefully review these terms to avoid Square terms of service exclusions.

Square Prohibited Businesses Terms of Service Breaches

A Square terms of service breach occurs when a merchant breaches any of Square’s rules. These are:

• Sale of Square prohibited goods and services
• Handling Square prohibited transactions
• Misrepresentation of products or services
• Circumvention of Square payment processing restrictions

Breach may result in withheld funds, closure of accounts, or legal actions.

Square Payment Processing Restrictions

Square imposes Square payment processing limits to manage risk. These limits are as follows:

• New merchant daily or weekly maximum transaction amount limits
• Cross-border payment limits
• High-risk business recurring billing limits
• Transaction monitoring in Square restricted businesses

Violating these limits initiates Square payment processing limitations.

Square Payment Processing Limitations

Merchants may incur Square payment processing limitations if they are in restricted businesses or fail to meet compliance requirements. Some examples include:

• Delayed payments for high-risk businesses
• Withheld money for suspicious activities
• Denial of service for unsupported businesses

These are limitations to promote Square payment processing terms compliance.

Square Payment Processing Terms

Square payment processing terms describe payment treatment. They cover:

• Settlements timelines
• Processing fees
• Refund policies
• Chargeback procedures

Merchants need to adhere to these terms to avoid being excluded from Square terms of service.

Consequences of Violating Square Policies

Violating Square terms of service compliance can lead to serious consequences, including:

• Permanent bans for Square forbidden businesses
• Withholding funds for Square forbidden transactions
• Freezing accounts for Square terms of service misuse
• Legal action in the most severe cases

Conclusion

Square is a great payment solution for the majority of businesses, but not all. From Square forbidden businesses and Square restricted business categories to Square forbidden business models and Square forbidden goods and services, merchants must be aware of these rules before joining up.

Square acceptable use policy, Square compliance guidelines, and Square service agreement limitations exist with the aim of enabling businesses to be conducted legally and securely. Neglect of these guidelines may lead to Square payment processing restrictions, Square payment processing limitations, and eventually termination.

By keeping within Square terms of service and Square payment processing terms, merchants will be in a position to enjoy a long-term commercial relationship with one of the most reliable payment processors globally.

Frequently Asked Questions (FAQs)

1. What are Square prohibited businesses?

Square prohibited businesses are businesses or industries that Square does not permit to transact on its platform regardless. Some of these include illegal businesses, counterfeiters, unlicensed gambling businesses, and groups that sell hate and violence.

2. What are Square restricted industries?

Square restricted businesses can utilize Square but have to comply with stringent requirements and might have extra Square payment processing limitations. Some examples are adult entertainment, CBD and hemp stores, firearms vendors, and telemarketing businesses.

3. Who are designated as Square banned merchants?

Square banned merchants are those merchants who have been permanently barred from using Square because they have seriously or repeatedly broken the Square acceptable use policy, Square compliance guidelines, or Square terms of service restrictions.

4. What are Square prohibited goods and services?

Square prohibited goods and services are counterfeit items, drugs that are illegal, stolen items, unlicensed gambling services, and weapons in restricted territories. Even though the business itself is legal, selling these items is a Square terms of service violation.

5. What are Square unsupported business types?

Square unsupported business types are those that Square does not support because of high risk, regulatory concerns, or too many chargebacks. Some examples are payday loan operations, multi-level marketing (MLM) operations, unlicensed crypto exchanges, and online pharmacies without validated licenses.

6. What are Square prohibited transactions?

Square prohibited transactions are activities of payments that are not permitted by Square, even on legitimate businesses. Some examples include money laundering via Square, making payments for items that are never shipped, or utilizing Square for peer-to-peer transactions outside of business.

7. What are Square restricted products?

Square restricted products are products that are only available for sale under stringent terms. They include things such as alcohol, CBD products, guns, and some drugs. The sellers of these must adhere to Square payment processing terms and local laws.

8. What are Square prohibited business models?

Square prohibited business models are business models that are too risky or fraudulent in nature. They include pyramid schemes, Ponzi investment schemes, unauthorized prepaid card resales, and timeshare reselling companies.

9. What is the Square acceptable use policy?

The. Square acceptable use policy is the official. document that indicates all Square forbidden businesses, enclosed. Square banned industries, Square forbidden transactions, and other limitations. Merchants need to follow this in order to guarantee Square terms of service compliance.

10. What happens if I exceed Square terms of service limits?

Abiding by Square terms of service restrictions leads to enforcement actions such as frozen payouts, limited account access, or bans. Repeat offenses are scored as Square terms of service prohibited activity, leading to permanent account suspension.