Rolling Reserve Definition

Merchant Account Rolling Reserve Explained:

What is a Rolling Reserve? A rolling reserve is a type of cash reserve that withholds a small percentage of all of a merchant’s gross sales in a non-interest-bearing account for a predetermined amount of time before releasing the funds to the merchant. Rolling reserves are typically used by credit card processors as a risk management tactic for high risk merchant accounts.

Unlike reserve accounts, which are usually established and funded in reaction to anticipated risk for a merchant, rolling reserves are taken up front from all of a merchant’s sales as a preemptive way for a processor to protect itself from potential loss. Most rolling reserves take 5-10% of a merchant’s credit card sales and hold them for a certain period of time, usually a week or two, before releasing them to a merchant. Business owners who cannot afford to wait for access to 10% of their revenue stream should be sure to avoid merchant accounts with rolling reserves attached.

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