Reserve

How it works

The provider settles most of your balance and retains a percentage. That retained amount is released on a rolling basis, commonly after a set number of days, so at steady state you are always a fixed slice behind.

Two numbers define it: the percentage held and the hold period. Together they decide how much of your working capital lives with the provider, which for a growing business can be a larger figure than any fee on the account.

Why it exists without chargebacks

Because refunds are not disputes. Crypto removes the payer’s ability to reverse a payment, and it does not remove your obligation to refund customers when you owe them. A provider that has already settled your money cannot reclaim it, so a reserve is the buffer against that.

Compliance exposure is the other reason, and it is the one that grows for merchants in higher risk verticals.

What to ask

The percentage and the hold period as numbers, not as a range. What would change them, and with how much notice. What happens to a reserve when the relationship ends and how long after.

None of these appear on a pricing page anywhere in this category, and all four affect the economics more than a tenth of a percent on the headline rate. Merchant services covers the surrounding terms, and settlement covers where the rest of your working capital sits.

Why it matters more as you grow

Because it scales with revenue while your need for working capital scales faster. A ten percent reserve on a business turning over ten thousand a month is a nuisance; the same percentage at half a million is a funding decision somebody has to make.

Ask what would change the percentage and with how much notice. A reserve that can be raised unilaterally after a volume spike is a different instrument from one fixed in the agreement, and both appear in this category.