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What is rolling reserve?


Question

What is a rolling reserve? Who has a right to withhold it?

Answer

Rolling reserve is a monetary deposit in favor of the payment processor to cover possible chargebacks filed in the future by the clients of a business.  

Withholding an amount in favor of the payment processor is a common practice when providing a new or high risk business with payment processing services, such as MOTO, payment gateway and merchant. 

Depending on the nature of the business and the monthly billing, the payment processor can withhold a larger or smaller amount. We recommend our clients to provide the required amount since the financial institution knows better the exact level of the risk of fraud and can refuse you the requested payment processing method.



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