Your provider holds back a slice of every payment and promises it back in six months. In the contract it is one line — “rolling reserve, 10%”. On paper it looks minor. On your balance it becomes a sum that would have covered a quarter of purchasing.
Here is how a rolling reserve actually works, how much money it locks up permanently, what drives the size, and how to get the terms reviewed.
What a rolling reserve is
A rolling reserve is a share of every settled transaction that the provider sets aside and holds for a fixed period. The money is yours, but you cannot touch it until the hold expires. It is not a fee and not a penalty: the amount comes back in full, just later than you need it.
The provider needs it to cover refunds and chargebacks if the business stops trading. Card schemes give the cardholder up to 540 days to dispute a payment, while the merchant is paid on day seven. The reserve covers the gap between those timelines — which is also why it is negotiated together with the other terms of a merchant account rather than on its own.
The maths on a real turnover
Take 100,000 EUR a month and a 10% hold for 180 days.
- Month one puts 10,000 EUR into reserve.
- Month two adds another 10,000, and the first 10,000 has not come back — the hold has not expired.
- By month six the reserve holds 60,000 EUR.
- From month seven releases begin, but new holds continue: the reserve settles at that 60,000 and stays there until turnover changes.
So the real figure is not 10% of turnover. It is roughly six monthly holds — 0.6 of a month’s turnover, frozen at all times. Grow, and the frozen amount grows with you, six months behind. At 300,000 a month the reserve sits near 180,000, permanently.
Why it has to be counted this way
The mistake that makes a reserve feel like an ambush is simple: it gets read as a one-off deduction. “Ten percent, fine.” But the deduction happens on every payment, while the release comes six months after each individual payment. While the business trades, the inflow of holds and the outflow of releases balance at the six-month level, and that sum simply drops out of working capital.
What it does to the business
A reserve is not a cost: the money comes back. It is a permanent cash gap, and that is what breaks planning. Stock, ad budgets and payroll are paid today while six monthly holds sit still.
It bites hardest at launch and during fast growth. Triple the turnover and you triple the frozen amount, released only six months after each payment. Part of that pressure eases when settlement money and working money are kept apart: acceptance lands on the merchant account, while operating balances sit on a business IBAN, and the gap is visible in advance rather than on payday.
The reserve is held out of what would otherwise be settled to you, so it shows up as a gap between turnover and money on the account. How settlements themselves run — schedules, destinations, batch sending — is described under payouts.
What the size depends on
The percentage and the term are not arbitrary. Several things drive them, and some are under your control.
- Chargeback ratio. The main one. While it sits inside scheme thresholds the reserve is negotiable; cross them and it rises, along with the penalties: a refund costs 50 EUR with us, a chargeback 100 EUR.
- Vertical. Long delivery times and subscription models generate more disputes, so reserves against them are higher.
- Trading history. Six months of clean processing tells a provider more than any business plan.
- Average ticket and delivery window. Prepayment for a service delivered in three months is not the same risk as goods shipped from stock.
- How you accept. Recurring subscription billing and one-off payments are assessed differently because they are disputed differently.
A reserve cannot be judged in isolation
Rate, per-transaction fee, settlement term and penalties together give the real price of accepting payments. We broke it down line by line in our piece on what a high-risk merchant account costs: a provider with no reserve and a rate a point and a half higher ends up more expensive at almost any turnover.
The reverse case: if acceptance has already been switched off, the reserve is only one of the questions worth asking before you sign anywhere new. What to do first is set out in our piece on what happens when a merchant account was terminated.
How to bring it down
A reserve is negotiable, not fixed. These work.
- Build history. Three to six months of processing with a low dispute rate is the strongest argument for a review.
- Remove the causes of disputes. Clear product descriptions, honest delivery dates, reachable support and a recognisable billing descriptor kill a visible share of disputes before they become chargebacks.
- Show financial standing. Reporting and account balances lower the provider’s risk and make the conversation concrete.
- Ask for a review on a schedule. Not “sometime”, but after a specific quarter, with the numbers in hand.
- Do not chase a zero reserve blindly. A zero reserve is usually paid for in the rate, and over distance that can cost more.
The terms at SharPay
We do not bury the reserve in small print. On a merchant account:
- rolling reserve — 10% for 180 days;
- MDR — 3%–5%, depending on the type of business;
- per-transaction fee — 0.50 EUR;
- settlement — T+7;
- EUR settlement via SEPA — 0.20%;
- refund penalty — 50 EUR, chargeback penalty — 100 EUR.
The rate is quoted as a range on purpose: it depends on the vertical, the turnover and the dispute history. We consider individual solutions for your business — priced against your actual profile rather than a public rate card. The remaining fees sit on the pricing page.
What acceptance itself includes — routing, a two-provider cascade, recurring billing, payment links — is described under payment processing.
In short
A 10% reserve held for 180 days means roughly 0.6 of a month’s turnover is frozen at any moment. That is not a reason to avoid card acceptance — it is a reason to model it in your cash flow from the start, keep disputes low, and come back to the negotiation with a track record.