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Holds and Reserves

Prerequisites

Before dealing with holds and reserves, understand:

TL;DR
  • Rolling reserve: 5-10% held per transaction, released after 90-180 days
  • Upfront reserve: Lump sum ($5K-$50K+) held until closure or risk improvement
  • Payout hold: Full payout stopped—something triggered risk review (chargeback spike, volume spike)
  • Response: Get it in writing, provide documentation fast, ask for risk/underwriting (not frontline)
  • MATCH list: 5-year blacklist if terminated—focus on getting funds released

Your processor is holding your money. This is stressful but usually not fatal. Understanding why helps you respond correctly.

Benchmark Caveat

The percentages below are typical ranges, not promises. High-risk verticals like travel, CBD, nutraceuticals, or high-ticket coaching will often see the top end of these numbers, or higher.

Types of Holds​

Rolling Reserve​

A percentage of each transaction is held and released on a delay (typically 90-180 days).

Typical terms:

  • 5-10% of each transaction
  • Released 90-180 days after the original transaction
  • Continues until processor is comfortable with your risk

Example: You process $100K in January with a 10% rolling reserve. $10K is held. In April (90 days later), that $10K releases. Meanwhile, you've built up reserves from February and March.

Cash flow impact: At steady state, you always have ~3-6 months of reserves sitting with your processor.

Upfront Reserve​

A lump sum held before you start processing, or demanded after a risk event.

Typical terms:

  • $5K-$50K+ depending on volume and risk
  • Held until account closure or risk improvement
  • May be funded from withheld payouts

When you'll see this:

  • New merchant in risky vertical
  • After chargeback spike
  • After volume spike that exceeded underwriting

Payout Hold​

Your regular payout is delayed or stopped entirely.

Why this happens:

  • Risk review triggered
  • Chargeback threshold exceeded
  • Suspicious activity flagged
  • Volume exceeded underwriting limits

This is the scary one. Unlike reserves (which you know about in advance), a payout hold means something went wrong.

Common Reserve/Hold Ranges​

ScenarioReserve/HoldDuration
Low-risk ecommerce, established0-5% rolling30-90 days
New merchant, low-risk5-10% rolling90-180 days
Medium-risk vertical10-15% rolling180 days
High-risk vertical15-20%+ rolling, plus upfront180+ days
After chargeback spike10-20% increase, or upfront demandUntil ratios improve
Risk review/investigationFull payout holdUntil resolved

What Triggers Holds​

TriggerProcessor ConcernYour Response
Chargeback ratio increaseFuture lossesProvide remediation plan
Volume spikeUnderwriting mismatchExplain the growth
Refund spikeProduct/service issuesExplain the cause
Industry newsVertical-wide concernProactive communication
Account changesFraud riskProvide documentation

When Funds Are Held: Step by Step​

Day 1-2: Assess​

  1. Determine the type - Is this a reserve increase, payout hold, or full freeze?
  2. Get it in writing - Email your processor asking for specific reason and timeline
  3. Check your contract - What did you agree to?

Day 3-7: Respond​

  1. Provide requested documentation quickly
  2. Offer a call with their risk/underwriting team
  3. Prepare a remediation plan if chargebacks are the issue

What to say:

We understand the need for additional review. We've prepared [documentation] and have implemented [specific changes] to address the concerns. We're available for a call at your convenience to discuss.

If They're Unresponsive​

  • Escalate: Ask for risk or underwriting, not frontline support
  • Document everything: Keep records of all communication
  • Consult an attorney if significant funds are held without explanation

Hard line: If frontline support can't answer, ask for risk or underwriting specifically. Those are the teams that decide holds.

Cash Flow Math​

Understanding your actual exposure:

Scenario: $200K/month, 10% rolling reserve, 90-day release

MonthProcessedHeld (10%)ReleasedNet Reserve
1$200K$20K$0$20K
2$200K$20K$0$40K
3$200K$20K$0$60K
4$200K$20K$20K$60K

At steady state, you have $60K sitting with your processor. Plan for this.

Negotiating Reserve Terms​

When you have leverage:

  • Clean history (6+ months, low chargebacks)
  • Growing volume
  • Long relationship

What to ask for:

  • Reserve percentage reduction (10% → 5%)
  • Shorter release period (180 days → 90 days)
  • Cap on total reserve amount

What to offer:

  • More transaction data/transparency
  • Faster response to risk inquiries
  • Higher minimum monthly volume commitment

MATCH Listing​

If they say you're being MATCH listed (Mastercard Alert to Control High-Risk Merchants, formerly TMF), assume that processor relationship is over.

Focus on:

  1. Getting reserved funds released (they must release after liabilities clear)
  2. Finding a specialist acquirer (some work with MATCH-listed merchants)
  3. Understanding why you were listed (for next processor conversation)

MATCH stays on your record for 5 years. Some codes are worse than others. A MATCH for chargebacks is more recoverable than a MATCH for fraud.

Where This Breaks​

Contract fine print: Your processor can often adjust reserves with little notice. Read the risk section of your contract.

Silent holds: Some processors hold payouts without clear communication. No news is not good news. If your payout is late, ask immediately.

Release timing: The "90 days" starts from the transaction date, not the hold date. If you're on a rolling reserve, you're always building new reserves.

Reserve on closure: When you close your account, reserves may be held 6-12+ months for chargebacks on past transactions.

Next Steps​

Funds just got held?

  1. Assess the type - Reserve increase, payout hold, or freeze?
  2. Get it in writing - Ask processor for specific reason
  3. Respond quickly - Provide documentation, offer call

Managing existing reserve?

  1. Understand your exposure - Calculate actual cash locked up
  2. Know when to negotiate - Clean history = leverage
  3. Ask for reserve release - Reduce % or shorten release period

Facing MATCH listing?

  1. Focus on fund release - They must release after liabilities clear
  2. Find specialist acquirer - Some work with MATCH merchants
  3. Understand the reason - For next processor conversation