Payments on hold pending standard account review

[Nebulalighting]

Like you have probably been, I have been working hard on building a viable Shopify Store. In a competitive online marketplace and in a COVID-19 world this is no easy feat.

Today I got the following message on my Shopify Dashboard 'Your payments from Shopify payments are on hold while we review your account. Contact Support for next steps on this standard review. This hold does not prevent your customers from checking out.'

I checked my email for further information, no email. I contacted Shopify chat, but they can't tell me why this has happened; I'm told it's been escalated.

As it turns out, I have a strong legal background. I consider that Shopify has unlawfully seized my pending payments. I am considering legal action  in a United States court. Why? Shopify needs a lawful basis to be able to seize payments that have been made in the context of a legally binding contract between two parties that it is not a party to.

In that sense, if account verification is required, that is a process that should be completed before Shopify allows its platform to be used as an online payment gateway for online stores that it hosts.  In the alternative, there should be a specified time period to resolve an issue before payments are suspended.

This is a very serious issue. For the record, Shopify's actions is damaging my business and I believe that there may be liability.

Then again, I'm just one person. It's a David and Goliath battle. But I do believe something needs to change here because the current process is unfair and in my view, is on a shaky legal foundation.

Just checked my email. Still no news from Shopify.

[Bo]

Hey there, @Nebulalighting 

Bo here from Shopify Support! 

Thank you for raising this issue, I would like to provide some clarity. I can completely understand where you are coming from and understand your frustration by being hit with this roadblock - it can be maddening and somewhat scary. Rest assured that this is in the hands of our Risk team. Our Risk team is working as hard as they can at the moment to get back to everyone as quickly as possible. The first place you will get an update is via email, as we do not have access to your case here in social support so please keep an eye out there for any information. We appreciate your patience and understanding at this time.

As for the legality of this process, I would like to bring your attention to Section B.3 of the Shopify Payments Terms of Service which are agreed upon by any merchant signing up for the service where it states: 

 "We reserve the right to hold funds in your Shopify Payments Account while awaiting the information requested above. Shopify may use your information to apply for card merchant acquiring accounts on your behalf with certain Payment Networks (such as American Express).

After we have collected and verified all your information, we will review your account and determine if you are eligible to use the Payments Services. We will notify you once your Shopify Payments Account has been either approved or deemed ineligible for use of the Payments Services."

These reviews generally take 2-3 business days. As we are experiencing much higher than usual volumes of contact, it may take a little longer. If you have any further questions please do let me know. 

All the Best,

Bo

[Nebulalighting]

Bo's message was reassuring. Shortly after I was asked to upload my Government ID, which I did and it seems my Shopify payment is scheduled for 30 November. I'm lucky in the sense that I have enough cash at hand to pay for order fulfillment without having to rely on a payout from sales. If I did have to wait for a payout, I would have unhappy customers waiting for shipment of paid orders and potential chargebacks as a result. Not a nice situation.

Nevertheless, the matter is resolved and I am grateful for the responsiveness from Shopify in relation to this matter.