Reserve

A reserve is a portion of your settlement the acquirer holds back rather than paying out, kept as security against chargebacks, refunds and losses that may surface after a sale has completed. It is not a fee and it is not lost, it is your money held on deposit.

Reserves exist because the acquirer, not the merchant, is ultimately liable if a business disappears owing refunds. In categories where sudden closure is a real risk, the reserve is what makes approval possible at all. Read it as the price of acceptance rather than as a penalty.

There are three common structures. A rolling reserve withholds a percentage of each batch and releases it on a delay, typically six months. A capped reserve builds to a fixed sum and then stops. An upfront reserve is funded before processing begins. Rolling is by far the most common in high-risk underwriting.

The number that matters is not the percentage, it is what the reserve plateaus at. A rolling reserve reaches a steady state equal to the percentage multiplied by the volume inside the hold window, and you can calculate that figure before you sign. Ask for it in writing, and ask what performance would justify a reduction after six to twelve months of clean processing.