20 Nov

By ipaytotal

Category: best high risk merchant account provider, best high risk merchant services, E-Commerce, high risk merchant account instant approval uk, high risk merchant account provider, online payments




olling Reserve Merchant Account: Especially for startup merchants and high-risk merchants, the bank takes all the possible caution to avoid any loss in their business. Due to which they have created a robust network of rules that need to be followed at all times so that economic and financial aspect of the business never sees any downfall. Rolling reserves are part of the acquiring bank’s risk management strategy, as it ensures the availability of sufficient liquidity in the event of high chargeback ratios. Simply, the rolling reserve is a buffer for chargebacks.

Rolling Reserve is a technique used by banks to create a buffer in case of bankruptcies, fraud, chargebacks and other incidents where the acquirer may lose money. The buffer is made by withholding a percentage of revenue for an agreed period of time. After this buffer time, it will be released to the merchant.

In the past, acquiring banks were more strict in their approach, favoring fixed reserves deposits or bank guarantees. Since this was next to impossible for businesses to find that capital funds, applications were often rejected by the acquirer banks. The rolling reserve is a way to allow businesses to build up their reserve rather than providing the required funds up front.

An example, an acquiring bank holds 20% of revenue over 60 days. This means during the first 60 days of business the Merchant will receive a payout of 80%, with 20% being held back. Therefore on the 61st day, funds that were held back on the first day will be released. On 62th day, funds held back from the second day would be released, and so on.

Many factors can affect an acquirer’s decision in determining a Rolling Reserve. Such as business model, length of time in business, turnover, profitability, delivery period and any customer guarantees.

These days, a Rolling Reserve is only used to provide security for acquiring banks to facilitate VISA and MasterCard processing services. Rolling reserves are typically imposed upon high-risk merchants because these businesses themselves are high-risk businesses, so the banks have to find some way to lower the risk of losing money.


Rolling Reserve is a fixed percentage (generally 5-10%) of a merchant’s transacted amount reserved by the bank which can be used in case of an excessive chargeback. This happens for only a short time interval (6-12 months) until the business gets some stability.

Upon completion of this time interval, the bank releases the amount to the merchant on the scheduled dates.

As discussed, rolling reserves are applied for the merchants having a high-risk business. The idea of introducing the rolling reserve is to avoid any loss of revenue in case of excessive chargebacks or frauds in the business.

Bank imposes a 7% rolling reserve on your account for 180 days to avoid the risk of losing money because they know that there will be a chargeback.

The payment processor will hold 7% of your sales transactions and you will not have access to this money until your account is completely closed or for the period of 180 days.


As discussed, rolling reserves are applied for the merchants having a high-risk business. The idea of introducing the rolling reserve is to avoid any loss of revenue in case of excessive chargebacks or frauds in the business.

What are the traits that result in high-risk business?

  • Excessive Number of Chargebacks – Most of the credit card networks have established 1% criteria where chargeback ratio of more than 1% will state as an excessive chargeback. Upon exceeding this limit, again and again, can make the business as a high-risk business.

  • Merchant With Poor Personal Credit– If you are a merchant with a history of bad credits in previous years or filed for bankruptcy then you can face consequences while getting the merchant account. This means that you might be denied a merchant account or get the Rolling Reserve Merchant Account for your business.

There are some businesses that are considered as the high-risk businesses, for example:

  • Computer Software And Hardware Business
  • Online Gambling Or Casinos
  • Bitcoins Or Forex Trading
  • Dating Services
  • VoIP Or Telemarketing
  • E-Commerce
  • Pharmaceuticals Or Drug Stores
  • Adult Materials, Products Or Services
  • Airline Tickets
  • Magazine Subscriptions

    If you are a merchant of those businesses or similar businesses then you will be provided with Rolling Reserve Merchant Account.

    Ipaytotal offers High Risk Merchant account services for businesses which are labeled as High Risk. You can contact our experts by placing a call at our number +44 800 776 5988.


Rolling reserves limit the merchant’s fund especially the profit. For new business, it gets difficult to generate revenue without being able to access the profit from the previous investment.
Here is how Rolling Reserve Merchant Account affects the business:

Cash Flow: As we discussed, rolling reserve definitely controls the cash flow in the business. Although the 5%-10% seems like a small number, it definitely affects the net profitability and its use to expand the business. It is strongly recommended to the merchant to consider the cash flow problem before agreeing for the Rolling Reserve Merchant Account.

Growth: If the bank is holding back an amount of money from the merchant, then it would be difficult for the merchant to grow and expand the business. This will result in slower business growth during the initial days of the business.

Competition: The current market has intense competition for every business. And it gets very difficult to compete in the market with a small budget. This means the rolling reserve also creates an obstacle for you to compete with other businesses with the same profile as yours.

Through the rolling reserve, the acquiring bank collects an agreed percentage of every transaction. The money remains within the merchant account at all times, but the bank releases the accumulated funds to the merchant at a scheduled date.A rolling reserve can always hurt your access to cash flow, making it difficult for you to compete in your industry. It can also mean that your net profitability and funds availability cannot be used for marketing your products and your company.

This kind of scenario can seriously hold your company’s growth. So keep in mind that if you make the decision to go into a high risk industry, though profits are high simultaneously the risk is also high. Be prepared for high-risk costs that may appear during the journey, and a rolling reserve is definitely one of them.

How does it work?

A rolling reserve works as a shield against chargebacks. The more risk a business possess, e.g. longer delivery periods or subscription businesses, the higher the rolling reserve will be calculated by the acquiring bank. Rolling reserve makes it certain that the merchant account has enough liquidity in case of a high amount of chargebacks by cardholders.

The money remains at all times on the merchant account and is then settled to the merchant at a later time (a maximum of 180 days). If a rolling reserve is applied to a transaction, the funds will be automatically settled in one of the weekly settlements after the given period stated in the merchant’s agreement. The rolling reserve can be reviewed after some time, if the merchant and the bank have more historical data on the transactions made and chargeback rates.

Is a rolling reserve applicable to all merchant accounts?

A rolling reserve may be applied to a merchant account depending on the business model and the average delivery time of the goods and/or services. Thus, additional information is required after registration in order to draw conclusions.

To find out about iPayTotal’s merchant services for a credit card processing merchant account, speak with a live representative directly at +44 800 776 5988 or get in touch with us through our website.

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