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  • Merchant Accounts Types
    1. Internet Merchant Accounts
    Guides
    1. Merchant Signup Guide
    2. Rolling Reserve
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    1. Virtual Terminal

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  • Rolling Reserve

    What is a rolling reserve and why is it required?

    A rolling reserve (otherwise known as 'holdback') is a percentage of an online business's total processing volume, which is generally held by credit card processors for a period of 6 months. This common practice forms in effect a safety net for you and the processor, allowing for the recovery of any and all liabilities that might occur between you the Merchant and the acquiring Bank.

    The reason behind it is very simple - your customers can do a chargeback for the services or goods you have provided to them. In some situations, fraudulent merchants may suddenly receive a high level of chargebacks, and the rolling reserve covers this scenario. Likewise if any regulations or laws are contravened by a merchant, then the rolling reserve can be used to pay fines and potential law suits.

    After 6 months of processing, your rolling reserve will be paid back to you each month. So in month seven of your trading, your rolling reserve will be released to you for the first month of trading. Then in month eight your reserve will be released for month two, so you will always have a 'rolling reserve' of 6 months due to you.

    At Payovation merchants are typically given a 6 month 10% rolling reserve.