Rolling Reserve

In this article, you will learn what a Rolling Reserve is and how it is applied at Payrexx.

What is a Rolling Reserve?

A Rolling Reserve is a financial buffer typically used between payment processors and merchants as protection against potential risks such as fraud, chargebacks, and other financial liabilities.

In this arrangement, the payment processor retains a certain percentage of each transaction from the merchant for a specified period. After this period expires, the retained amounts are gradually (rolling) paid out.

When is a Rolling Reserve applied?

Whether a Rolling Reserve is applied and the specifics of its implementation depend on the assessed level of risk. Examples of situations where a Rolling Reserve may be applied (this list is not exhaustive) include:

• The merchant operates in a high-risk industry.

• The merchant’s transaction history shows high chargeback rates.

• The merchant runs a new business that lacks prior experience.

• The merchant’s business model involves long delivery times (e.g., travel, hospitality, events, or ticket sales).

How does the Rolling Reserve work?

The following section explains how the Rolling Reserve works at Payrexx:

• Payrexx retains a certain percentage of each transaction. This amount is held as collateral and is not immediately paid out to the merchant.

• The retained amount remains locked for 180 days. After this period, it is released and paid out to the merchant.

• With each payout interval, a new portion of the revenue is withheld. At the same time, older reserves are released after 180 days, creating a continuous cash flow.

Graphical representation of the amounts withheld and released 180 days later

Further information about the Rolling Reserve can be found in our Terms of Use under section 9.8 on page 16.

Example scenario

A company processes EUR 100,000.00 in credit card payments per month. Payrexx withholds (for example) 3% of each transaction for 180 days.

Calculation of the Rolling Reserve over 6 months

Month	Revenue	Withheld	Released (after 180 days)	Reserve Balance
1	EUR 100,000.00	EUR 3,000.00	-	EUR 3,000.00
2	EUR 100,000.00	EUR 3,000.00	-	EUR 6,000.00
3	EUR 100,000.00	EUR 3,000.00	-	EUR 9,000.00
4	EUR 100,000.00	EUR 3,000.00	-	EUR 12,000.00
5	EUR 100,000.00	EUR 3,000.00	-	EUR 15,000.00
6	EUR 100,000.00	EUR 3,000.00	-	EUR 18,000.00
7	EUR 100,000.00	EUR 3,000.00	EUR 3,000.00	EUR 18,000.00
8	EUR 100,000.00	EUR 3,000.00	EUR 3,000.00	EUR 18,000.00
9	EUR 100,000.00	EUR 3,000.00	EUR 3,000.00	EUR 18,000.00

Impact of the Rolling Reserve

• Maximum Reserve Balance: After 6 months, the highest reserve is EUR 18,000.00.

• From the 7th month onwards, the reserve remains constant, as the amount released is equal to the amount withheld.

• The company will receive monthly payouts of EUR 97,000.00 (EUR 100,000 - EUR 3,000.00). From the 7th month, an additional EUR 3,000.00 will be paid out from the released reserve.

Overview of the Rolling Reserve

You can view the current figures related to your reserves at any time in your Payrexx account.

Total amount of reserves

The current total amount of the withheld Rolling Reserve can be found at any time under Payouts:

Current total amount of reserves in the Payrexx account

Withheld and disbursed amounts

When you click on a specific payout under Payouts to open the detailed view, you will see the total amounts of the funds withheld and disbursed during that payout period:

The withheld and the released amount in the corresponding payout period

1. Reserve: This amount was withheld in the corresponding payout period.

2. Release of reserve: This amount of previously withheld funds was disbursed to the merchant in the corresponding payout period.

The Rolling Reserve in the transaction export

In the transaction export, the amounts withheld and disbursed as part of the Rolling Reserve are displayed as follows:

Representation of the Rolling Reserve in the transaction export

1. payout-reserve: An amount that has been withheld.

2. payout-reserve-reversal: An amount that has been disbursed.