What is a reserve account?
A reserve account is a holding account controlled by an acquirer or payment provider where a portion of a merchant’s funds may be temporarily retained.
Why are reserve accounts used?
They protect the provider against risk from chargebacks, refunds, or fraud, especially for higher risk merchants.
How do reserve accounts work?
A percentage of each transaction is held for a set period before being released to the merchant.
What types of reserves exist?
Common types include rolling reserves, fixed reserves, and capped reserves.
How do reserve accounts affect merchants?
They impact cash flow by delaying access to a portion of funds, which can be challenging for some businesses.