What is a Rolling Reserve?

A Rolling Reserve ia A specified amount of money or percentage of monthly processing volume held by the processor to guard against excessive chargebacks and other potential financial risks. When a merchant has a "Rolling Reserve" he or she authorizes the bank to debit from daily transaction settlement proceeds also known as credit card daily batch totals the specified percentage of their gross bankcard sale volume (MasterCard, Visa, and Discover Network) and have it deposited into the Reserve Account. Most processors processing credit card transactions for higher risk Internet businesses generally impose a 5% to 20% reserve for six months. The six month time period is also known as "The rolling reserve holding period". The Rolling Reserve has been aptly named because each month after the sixth month, the first month's reserve is paid out to the merchant.

In most cases, the Merchant will be required to accumulate a minimum Rolling Reserve deposit based on the specified percentage of its daily transaction settlement proceeds for a period of not less than six (6) complete months (the "Rolling Reserve Holding Period") The amount of deposit and length of time funds will be held may be modified at the reasonable discretion of the processor and the bank.