I copied and pasted this from the terms and conditions of what I thought was one of the best merchant account providers:
B. Reserve Account.
i. Establishment. You will establish and maintain a non-interest bearing deposit account (“Reserve Account”) at Bank initially or at any time in the future
as requested by Processor and Bank, with sums sufficient to satisfy your current and future obligations as determined by Processor and Bank. You
authorize Bank to debit the Designated Account or any other account you have at Bank or any other financial institution to establish or maintain funds
in the Reserve Account. Bank may deposit into the Reserve Account funds it would otherwise be obligated to pay you, for the purpose of establishing,
maintaining or increasing the Reserve Account in accordance with this Section, if it determines such action is reasonably necessary to protect its
ii. Authorizations. Bank may, without notice to you, apply deposits in the Reserve Account against any outstanding amounts you owe under this Agreement
or any other agreement between you and Processor or Bank. Also, Processor and Bank may exercise their rights under this Agreement against the
Reserve Account to collect any amounts due to Processor or Bank including, without limitation, rights of set-off and recoupment.
iii. Funds. Funds in the Reserve Account will remain in the Reserve Account until 270 calendar days following the later of termination of this Agreement
or your last transmission of sales drafts to Processor or Bank, provided, however, that you will remain liable to Processor and Bank, for all liabilities
occurring beyond such 270 day period. After the expiration of such 270 day period you must provide Processor with written notification indicating
you desire a release of any funds remaining in the Reserve Account in order to receive such funds. You agree that you will not use these funds in the
Reserve Account for any purpose, including but not limited to paying chargebacks, fees, fines or other amounts you owe Processor and Bank under this
Agreement. Bank (and not Merchant) shall have sole control of the Reserve Account.
iv. Assurance. In the event of a bankruptcy proceeding and the determination by the court that this Agreement is assumable under Bankruptcy Code §
365, as amended from time to time, you must establish or maintain a Reserve Account in an amount satisfactory to Processor and Bank.
I'm told that the sponsor bank forces the providers to use this kind of language, whether they want to or not. Is it worthwhile to contact the sponsor bank and talk to them? There's no way on earth that I would agree to such terms. My money is mine. I'll pay the processing fees, but with a golden credit rating that I have, I won't be subjected to that BS. Has anyone here successfully gotten such clauses removed?