A rolling reserve is a risk management tool used by payment processors for businesses that are considered high-risk. The processor withholds a certain percentage of the merchant’s daily transaction revenue in a non-interest-bearing account (the reserve) for a set period. This reserve fund is used to cover potential losses from chargebacks or fraud. After the holding period, the funds are released to the merchant.
Frequently Asked questions (FAQs)
- Why would a processor place a rolling reserve on my account?
This typically happens with businesses in high-risk industries (like travel or ticketing, where services are delivered long after payment), businesses with a high chargeback history, or new businesses with no processing history. It’s a way for the processor to protect itself from potential losses. - How much do they hold and for how long?
A common example is a “10% for 90 days” reserve, where 10% of your daily sales are held and released to you 90 days later on a rolling basis. - Is a rolling reserve common for users of Charge for Stripe?
For most low-risk small businesses (like market vendors, cafes, or service providers) using Charge for Stripe, a rolling reserve is not common. It is typically reserved for accounts that Stripe’s risk analysis flags as having a higher potential for disputes.
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