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What is a Reserve on a Merchant Account

A high-risk business can benefit from having a reserve on their account in several ways

A rolling reserve is a hold placed on a merchant’s funds by a payment processor or acquiring bank. The purpose of a rolling reserve is to protect the payment processor or acquiring bank from any potential losses due to chargebacks, fraud, or other unexpected events that may arise.

When a high risk merchant signs up for a merchant account, the payment processor or acquiring bank may require a rolling reserve as a condition of approval. The rolling reserve is typically a percentage of the merchant’s daily or monthly sales, and the funds are held for a specified period of time, usually between 30-180 days.

During this time, the payment processor or acquiring bank will release a portion of the funds to the merchant on a rolling basis. For example, if a merchant has a 10% rolling reserve and processes \$10,000 in sales in a given day, \$1,000 would be held in reserve, and the remaining \$9,000 would be released to the merchant. Over time, as the reserve period elapses and the payment processor or acquiring bank releases more funds to the merchant, the rolling reserve amount will decrease until it reaches zero.

The rolling reserve provides a measure of protection for the payment processor or acquiring bank, as it ensures that there are sufficient funds available to cover any potential chargebacks or refunds. For the merchant, it can be a valuable tool for managing cash flow, as it provides a predictable source of funds that can be used to cover expenses or invest in the growth of the business.

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Having a reserve on your account can help a high-risk business mitigate risk, improve cash flow, increase merchant account approval rates, and boost customer confidence.

Blue Wave Pay can be a valuable partner for your high-risk business, offering a range of services and support to help manage your merchant account effectively and efficiently.

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5 Industries that a reserve may be needed on their account

  1. Travel and Tourism: Businesses such as airlines, hotels, and travel agencies are considered high-risk due to the potential for chargebacks related to canceled or delayed travel plans.

  2. Online Retail: E-commerce businesses that sell high-ticket items, adult products, or digital goods may be considered high-risk due to the potential for fraudulent transactions.

  3. Gambling and Gaming: Online casinos, sports betting sites, and other gambling and gaming businesses are considered high-risk due to the potential for chargebacks and fraud.

  4. Debt Collection: Debt collection agencies are considered high-risk due to the potential for complaints and legal action related to aggressive or improper collection practices.

  5. Healthcare: Healthcare providers and medical billing companies may be considered high-risk due to the potential for disputed or fraudulent claims.


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