Overview of negative balances and auto-debits, and how it affects your Squarespace Payments account.

Use this guide to understand and resolve negative balances in your Squarespace Payments account. To understand negative balances with Squarespace Payments, you'll need to know the following terms:

• Account balance: total of your available and pending balance.
• Available balance: total of funds that have settled but haven't been paid out.
• Pending balance: total of funds that haven't settled and aren't available for payout yet. 
• Processing funds: pending balance minus upcoming payout amount.
• Payout: the transfer of funds from your Squarespace Payments account to your external bank account.

Note: Squarespace Payments will be rolling out to users in the United States in the coming months and will launch in additional markets in 2024.

Negative Balance

A negative balance occurs when your total account balance is below zero dollars. This may be caused by refunds or chargebacks. Negative balances can be cleared by pending funds from sales. However, if you have a negative balance at the end of the day, midnight UTC, the funds will be auto-debited from your linked bank account.

Auto-debits

If your Squarespace Payments account balance is below zero at the end of the business day, the negative amount is debited from your connected bank account the next business day. 

What happens if an auto-debit fails?

In the event that you have a negative account balance, and the auto-debit fails, you won't be able to issue refunds or receive payouts until the negative balance is resolved. An auto-debit may fail if there is an issue with your connected bank account, like having insufficient funds, or if the bank account is closed. 

After the first failed auto-debit, up to three more attempts are made when you update your connected bank account. If the failed auto-debit is unable to resolve over the course of 20 business days, your account will be suspended.  

Note: You can still take payments during the auto-debit process. If you take a payment that resolves your negative balance, your ability to issue refunds and and receive payouts is restored.

To resolve the failed auto-debit, update the connected bank account. After you update your connected bank account, you’ll need to wait for a successful auto-debit try. You'll receive an email notification when your negative balance has been successfully cleared. In the event your negative balance is resolved before the auto-debit occurs, you'll receive a payout of those funds.

Unresolved auto-debits

If the failed auto-debit is unable to resolve for more than 20 business days, your account will be suspended. During suspension, your online store can no longer accept payments and you'll have a limited version of your account dashboard. You’ll receive an email with next steps for repayment so the account suspension can be cleared.