A rolling reserve, also known as a holdback, is an element of an offshore merchant account that acquiring banks require. Rolling reserves help reduce risk factors when selling large ticket items or services, processing high monthly volumes, or simply working in a high risk industry. The Instabill merchant account rolling reserve is a fixed percentage of a merchant’s gross weekly turnover (or sales).
The Instabill merchant account rolling reserve ensures that merchants have funds readily available to cover any potential unexpected chargebacks, refunds, or uncollected fees or fines when the merchant is unable to pay for these charges. The merchant’s acquiring bank holds the rolling reserve funds in a zero, non-interest bearing account and releases them to the merchant 180 days (or 6 months) after the day of the turnover.
There are specific factors that affect a merchant’s rolling reserve percentage. For instance, an increase in an Instabill merchant account rolling reserve may result from high chargeback or refund levels or selling large ticket items. When this occurs, the acquiring bank releases any additional funds after 180 days.
To learn more about the Instabill merchant account rolling reserve, contact us online or call 1-800-318-2713 to speak with your merchant account manager.