Unfortunately, the funds in your merchant account can be held or frozen at the payment processor's discretion. The most common reasons resulting in a hold or freeze on your merchant account are as follows: violation of your merchant agreement, a chargeback ratio in excess of the account's chargeback threshold, suspicious or fraudulent activity, or surpassing processing parameters.A merchant account hold or freeze can result in cash flow problems or, worse, the complete termination of your account. As a precaution, many processors will set aside a small portion of your funds from your merchant account into a reserve account.