Many banks require a non-interest-bearing deposit
equal to 1 or 2 times the average estimated monthly credit
card sales by a merchant. This can pose a substantial barrier
to accepting credit cards for some merchants.
To overcome this barrier, some of our accounts include
a reserve. The rolling reserve holds either 5 or 10 % of
total approved transactions over the previous six month
Why do we do this? The purpose of this
deposit is to cover any purchase refused by a customer and
for which the customer's credit card issuer refuses to pay
(a chargeback). A reserve is normally placed for higher
risk business models where disputes often occur, or for
start-up businesses where there is no processing history.
How does it work? Following the seventh
month of operation (and every month thereafter) the reserves
generated from the first month of operation (and every month
thereafter) will be forwarded to the merchant of each sale
for a specified period, after which time it is paid to you.
Please read 'What is a chargeback
and how do I avoid them?'