How does my Franchisor Deposit work?

As part of its acquiring operation, Adyen holds full financial responsibility over incoming chargebacks. When shoppers 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 for Adyen. In order to manage the exposure to financial losses, Adyen may require a deposit.

 

Deposits are also held in order to protect merchants from settlement uncertainties in case of 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.

 

For the above reason, Adyen might require a deposit for franchisees based on their business model. When a deposit is required, the Franchisor will be notified.

 

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