How does my franchisor deposit work?
Why Adyen might require deposit
As part of itsacquiring operation, Adyen holds full financial responsibility over incoming chargebacks when customers exercise their right to a chargeback via a reversible and/or defensible payment method. If the merchant stops processing with Adyen or ceases its operations, Adyen may no longer be able to offset the chargeback with available funds (i.e. incoming funds and payables) which results in a potential loss. To manage the exposure to financial losses, Adyen may require a deposit.
Deposits are also held to protect merchants from settlement uncertainties in extreme scenarios (e.g., COVID pandemic). By holding the necessary funds, we can maintain the stability of cash outflow rather than having to block payouts when there are unforeseen events.
This is the reason Adyen might require a deposit for franchisees based on their business model. When a deposit is required, we’ll notify the franchisor.
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