What is a Reserve Account?
A Reserve Account is a portion of your transaction proceeds that we hold back for a period of time. It acts as a security deposit against possible future chargebacks, refunds, scheme fines or other amounts you might owe under your merchant agreement.
The money in a Reserve Account still belongs to you. It is simply held back to cover risks that may arise after a transaction has settled.
When a Reserve Account Would Be Set Up
A Reserve Account is not standard for most merchants. It only applies in specific situations, including:
- Where your business is in a category that carries a higher risk of chargebacks.
- Where your chargeback ratio rises above the scheme threshold (typically 1% of transactions).
- Where there is a sudden change in your turnover, transaction profile or business activity that increases our risk exposure.
- Where you exceed your transaction limit and additional funds need to be secured while a new limit is agreed.
- Where your financial position changes in a way that affects our risk assessment (for example, an insolvency event).
- Where your account is being closed or terminated, to cover any chargebacks that may come in after closure.
- Where required by a card scheme, our settlement partner, Apple, a regulator or by Applicable Law.
How a Reserve Account is Funded
A Reserve can be funded in one of three ways, or in a combination of them:
- Rolling withhold: A small percentage of each payout is held back until the target reserve level is reached.
- Upfront deposit: You make a one-time deposit into the Reserve.
- Temporary fee adjustment: Your transaction fee is increased temporarily, with the difference flowing into the Reserve, until the target level is reached.
💡 We will always tell you in writing before a Reserve is set up. The notice will include:
- 💡 The reason for the Reserve.
- 💡 The target amount or percentage.
- 💡 How it will be funded.
- 💡 The conditions under which the Reserve will be reduced or released.
Where the Money is Held
- Reserve funds are held in a separate account managed by Glimmer, our acquiring partner.
What Reserve Funds Can Be Used For
We may apply Reserve funds to settle any of the following amounts that you owe:
- Chargebacks
- Refunds and reversals
- Scheme fines or assessments
- Apple-related suspensions or penalties
- Negative balances on your account
- Fees and Service Charges that could not be deducted from a payout
- Any other amounts due under your merchant agreement
💡 The Reserve is a backstop. We only draw on it where there are not enough funds in your normal payout balance to cover what is owed.
Viewing Your Reserve Balance
- If a Reserve Account has been set up for your business, the balance and any movements will be reflected in your monthly statement.
When the Reserve Is Released
- A Reserve is released once we are satisfied that the risk it was protecting against has passed. This usually happens once the chargeback window for the relevant transactions has closed (up to 120 days from the transaction date) and there are no open disputes, scheme matters or unpaid amounts.
- For a closed account, the Reserve is held for a reasonable period after termination to cover any post-closure chargebacks. Once that window has passed, any remaining balance is paid into your Nominated Bank Account.
- A Reserve can also be reduced or released early if the conditions originally set out are met (for example, your chargeback ratio drops back below the scheme threshold and stays there).
Disputing a Reserve
If you do not agree with the way a Reserve has been set up or applied, please contact us via any of our Support Channels. We will explain the basis for the decision and review any new information you provide.