What is a rolling reserve in card payments?
A rolling reserve is a percentage of a merchant’s card sales that an acquirer, PSP or payment facilitator withholds from each payout and releases after a fixed hold period. It covers refunds, chargebacks and fees that arrive after the merchant has been paid. Each day one tranche is released while a new one is withheld.
In detail
A rolling reserve is collateral taken from sales. The provider withholds a percentage of each payout, keeps it for a set number of days, then releases it.
Why it exists
Under card scheme rules, the acquirer pays if a merchant cannot fund a refund or a chargeback. Disputes can arrive months after a sale, long after the merchant has received the money. The reserve covers that gap.
How it looks in practice
- Rate: a percentage of processed volume, often between 5% and 15% according to Stripe’s guide.
- Hold period: commonly 30 to 180 days, depending on the business.
- Release: each day’s tranche is released when its hold period ends, so the balance turns over continuously.
- Debits: refunds and chargebacks are taken from the reserve only when the payout balance is not enough.
A worked case from Adyen’s documentation: with a 10% reserve and a 30-day cycle, 100 dollars of a 1,000 dollar sales day are released on day 31.
The mechanism is explained step by step in What is a rolling reserve?. Operators need each tranche to be traceable in their reconciliation and settlement reports, so merchants can see what is held and when it returns.