# Rolling Reserve

## 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](https://docs.payrexx.com/merchant/english/payment/disputes/prevention/fraudulent), 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](https://docs.payrexx.com/merchant/english/account/payouts#payout-intervals), a new portion of the revenue is withheld. At the same time, older reserves are released after 180 days, creating a continuous cash flow.

<div align="left"><figure><img src="https://1455115231-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYJhU4qriZCz_Wxs0T0-887967055%2Fuploads%2F9ZchXuRMb1dWQiJKSM7G%2Fimage.png?alt=media&#x26;token=dd407140-9dea-48f8-a324-ac69bd8c9064" alt=""><figcaption><p>Graphical representation of the amounts withheld and released 180 days later</p></figcaption></figure></div>

{% hint style="info" %}
Further information about the Rolling Reserve can be found in our [Terms of Use](https://payrexx.com/en/gtc) under section 9.8 on page 16.
{% endhint %}

### 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

<table><thead><tr><th width="69.25933837890625">Month</th><th width="149.4444580078125">Revenue</th><th width="133.370361328125">Withheld</th><th>Released (after 180 days)</th><th>Reserve Balance</th></tr></thead><tbody><tr><td>1</td><td>EUR 100,000.00</td><td>EUR 3,000.00</td><td>-</td><td>EUR 3,000.00</td></tr><tr><td>2</td><td>EUR 100,000.00</td><td>EUR 3,000.00</td><td>-</td><td>EUR 6,000.00</td></tr><tr><td>3</td><td>EUR 100,000.00</td><td>EUR 3,000.00</td><td>-</td><td>EUR 9,000.00</td></tr><tr><td>4</td><td>EUR 100,000.00</td><td>EUR 3,000.00</td><td>-</td><td>EUR 12,000.00</td></tr><tr><td>5</td><td>EUR 100,000.00</td><td>EUR 3,000.00</td><td>-</td><td>EUR 15,000.00</td></tr><tr><td>6</td><td>EUR 100,000.00</td><td>EUR 3,000.00</td><td>-</td><td>EUR 18,000.00</td></tr><tr><td>7</td><td>EUR 100,000.00</td><td>EUR 3,000.00</td><td>EUR 3,000.00</td><td>EUR 18,000.00</td></tr><tr><td>8</td><td>EUR 100,000.00</td><td>EUR 3,000.00</td><td>EUR 3,000.00</td><td>EUR 18,000.00</td></tr><tr><td>9</td><td>EUR 100,000.00</td><td>EUR 3,000.00</td><td>EUR 3,000.00</td><td>EUR 18,000.00</td></tr></tbody></table>

#### 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**:

<div align="left"><figure><img src="https://1455115231-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYJhU4qriZCz_Wxs0T0-887967055%2Fuploads%2FlfdYNko8YoDkuHMV9ihn%2Fimage.png?alt=media&#x26;token=cecb556e-a71c-4af2-9e15-cc40241e8ef9" alt=""><figcaption><p>Current total amount of reserves in the Payrexx account</p></figcaption></figure></div>

### 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:

<div align="left"><figure><img src="https://1455115231-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYJhU4qriZCz_Wxs0T0-887967055%2Fuploads%2FVDEO8BbBHZvone2vgoUg%2Fimage.png?alt=media&#x26;token=efb7b44d-53db-41c3-94d6-4f5411dab4c2" alt=""><figcaption><p>The withheld and the released amount in the corresponding payout period</p></figcaption></figure></div>

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](https://docs.payrexx.com/merchant/english/account/payments/transactions#transaction-export), the amounts withheld and disbursed as part of the Rolling Reserve are displayed as follows:

<div align="left"><figure><img src="https://1455115231-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYJhU4qriZCz_Wxs0T0-887967055%2Fuploads%2FlVJX6Wwc4gdb2durDXMl%2Fimage.png?alt=media&#x26;token=c95866db-b745-4bb5-80dd-f7fdf38c5637" alt="" width="366"><figcaption><p>Representation of the Rolling Reserve in the transaction export</p></figcaption></figure></div>

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