Approvals & Underwriting

Reserve

A portion of a merchant's funds a provider holds to cover potential future chargebacks or refunds. Reserves are common in high-risk processing and are released over time as the account proves stable.

A reserve is a risk buffer, not a penalty. It protects both sides, and a well-structured reserve shrinks or releases as your track record grows.

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Related terms

Approvals & Underwriting

Rolling Reserve

A reserve where a set percentage of each period's sales is held for a fixed window — for example 10% held for 180 days — then released on a rolling basis. It steadily builds a buffer without taking a large lump sum up front.

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Chargebacks & Risk

Chargeback

A forced reversal of a card payment initiated by the cardholder's bank, usually after a dispute over fraud, a product issue, or a billing complaint. Chargebacks return funds to the customer and often add a fee for the merchant.

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Approvals & Underwriting

Underwriting

The review process a provider uses to decide whether to approve a merchant and on what terms. Underwriters assess the business model, documentation, processing history, and risk exposure to set approval, pricing, limits, and any reserve requirements.

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