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What is a Rolling Reserve?
A Rolling Reserve is a portion of funds held by a payment system or bank from each transaction for a specific period (usually 90 to 180 days) to mitigate financial risks such as chargebacks or fraudulent activities.
Why do banks or payment systems hold reserves?
Reserves are held as a precautionary measure to protect against financial risks. They help payment systems cover potential losses in case of disputes, chargebacks, or fraud.
Can the amount of retained reserves be reduced?
Yes, by optimizing cooperation terms with payment systems, improving the financial stability of your business, and reducing risks, you can decrease the amount of retained reserves.
When are the frozen funds returned to the business?
Funds held in a Rolling Reserve are released after the predetermined period if no disputes or chargebacks have occurred during that time.
How can your company assist with Rolling Reserve?
We provide a full range of services: analyzing terms, negotiating with payment systems, mitigating risks, and improving financial flows to minimize the impact of reserves on your business.
What risks are associated with Rolling Reserve?
The main risks include freezing a significant portion of working capital, which may impact the business's liquidity. Additionally, poorly calculated reserves can create further financial challenges.