Reference guide
PayPal holding funds? How payment holds work.
Why PayPal, Stripe and Square hold money, for how long, and what their terms allow.
- Processors hold funds to cover refunds, chargebacks and disputes a business might not cover.
- PayPal risk holds generally last up to 21 days; Stripe reserves normally 30 to 90.
- Reserved money is still yours; it releases at term end, minus refunds or disputes covered.
- Answer the notice with documents. A second PayPal account breaks PayPal's user agreement.
Three different things
Hold, reserve or limitation?
| Term | What it is | Named by |
|---|---|---|
| Payment hold | A payment neither sender nor recipient can use, for now | PayPal |
| Reserve | Balance set aside against refunds, reversals and disputes | PayPal, Stripe, Square |
| Limitation | Restricted account activity while risk or information is reviewed | PayPal |
| Money in reserve | Still yours, minus any refunds or disputes it covers | PayPal, Stripe, Square |
The reason
Why processors hold funds
Stripe says the processor answers for refunds and disputes a business cannot cover.
| Factor | PayPal | Stripe | Square |
|---|---|---|---|
| Industry risk | Industry more likely to see chargebacks | Industry conditions | Industries prone to chargebacks |
| Delivery timing | Delivery time frames; preselling orders | Longer-than-average delivery windows | Prepayment for goods or services |
| Disputes and claims | A high number of claims and disputes | Above-normal dispute activity | Account chargeback rate |
| Pattern changes | Sales spikes or changed selling patterns | Unexplained sharp increase in volume | Inconsistent transaction sizes or counts |
| History | Processing history with PayPal and others | Payment activity | No processing history with Square |
| Finances | Business and personal credit history | Financial stability | Too little balance to cover chargebacks |
Reserve types
Rolling, fixed and minimum reserves
| Type | How it works | Used by |
|---|---|---|
| Rolling | A percentage of each day's payments held, released on schedule | PayPal, Stripe, Square |
| Fixed | A percentage of new payments held until one release date | Stripe |
| Minimum or upfront | A set balance held, taken at once or built up | PayPal |
| Jumpstart | Funds moved from the available balance into reserve immediately | PayPal |
| Balance transfer | Part of the existing balance moved into reserve | Stripe |
- PayPal's own example
- 10% held for a 90-day rolling period: day 1 money releases on day 91.
- Card payments only
- Square says its reserves apply to card payments, not ACH bank transfers.
How long
How long funds can stay held
These are each company's published terms. Your own notice states your actual terms.
| Processor | Situation | Stated time |
|---|---|---|
| PayPal | Risk-based payment hold | Generally up to 21 days |
| PayPal | Payment challenged as reversible | Until resolved, no longer than 180 days |
| PayPal | Balance after a restricted activity | Up to 180 days; longer under legal process |
| PayPal | Reserve review | Account reviewed within every 180 days |
| PayPal | Some industries or credit histories | A reserve may never be fully removed |
| Stripe | Reserve term | Normally 30 to 90 days |
| Stripe | Before a reserve expires | Credit review; may remove, reduce or extend |
| Stripe | Rare cases | A reserve may be required indefinitely |
| Square | Reserve review | After a minimum of six months |
What you can do
Legitimate steps while funds are held
- Read the notice
- PayPal, Stripe and Square send the terms by email and show them in your account.
- Answer information requests
- PayPal's agreement requires cooperating with reasonable requests for financial statements and documents.
- Add tracking
- PayPal may release a hold early after you upload shipment tracking.
- Appeal if offered
- Stripe shows an appeal option on the Balances page when a reserve can be appealed.
- Send supporting documents
- Stripe asks for full detail and supporting documentation with an appeal.
- Work down disputes
- Stripe: respond to disputes quickly and show shipping, refund and return policies clearly.
- Watch complaint rates
- PayPal suggests keeping buyer complaint rates below 1% of sales.
What not to do
Steps that break PayPal's agreement
- A second account
- PayPal lists opening new accounts while one is restricted as a restricted activity.
- Someone else's details
- PayPal also lists using another person's account, or information that is not yours.
- The consequence
- PayPal may then close accounts, or hold balances for up to 180 days.
Questions
What people ask about held funds.
- Why is PayPal holding my funds?
- PayPal cites new selling activity, disputes, sales spikes or higher-risk items, among others.
- How long can PayPal hold funds?
- Risk holds generally up to 21 days; disputed payments until resolved, at most 180.
- Why is Stripe holding my funds?
- Stripe places reserves when it sees higher dispute, refund or fulfillment risk.
- What is a rolling reserve?
- A share of each day's payments held for a set period, then released.
- Can I appeal a Stripe reserve?
- If the Balances page shows an appeal option. Otherwise, Stripe says to contact support.
- Can I open another PayPal account while mine is limited?
- No. PayPal's user agreement lists that as a restricted activity.
Sources
Where every fact comes from.
Primary sources only. Rules change, so check the date above.
- PayPal: User Agreement, last updated September 1, 2026 (holds, limitations, reserves)
- PayPal Help Center: What are reserves?
- PayPal Help Center: Why is my money being held in reserve?
- PayPal Business Resource Center: Account reserves
- PayPal Business Resource Center: Why is your PayPal money on hold
- Stripe Support: Reserves, frequently asked questions
- Stripe Support: Reserves (types and examples)
- Square Support: Manage payment reserves
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