Understand reserves before you sign.

The basic mechanisms.

PayPal describes rolling reserves as a percentage of transactions held and released on a schedule, and minimum reserves as a required balance. Square describes a rolling reserve in which a share of card payments is set aside. The terms of the individual account determine the actual arrangement.

A reserve is distinct from a processing fee. It addresses exposure such as disputes or reversals under the provider’s terms. Do not treat the reserved amount as available operating cash before it is released.

Read the percentage alongside the conditions.

As a simple illustration, a 10% reserve on $10,000 of eligible sales would withhold $1,000 before considering other charges or adjustments. This is an example only, not a quote. To understand cash flow, you also need the release timing and any conditions that can change it.

Ask whether the reserve applies to all sales, whether it has a cap, how deductions are reported and whether refunds or disputes affect releases. Clarify what happens after processing stops. A percentage alone cannot answer those questions.

Keep a working reserve schedule.

Track the amount withheld, expected release dates and actual releases separately from ordinary payouts. Reconcile the schedule against the provider’s reports. Where a term is unclear, obtain clarification in writing and preserve the response.

Compare offers using an ordinary month and a slower month, including fulfillment costs and refunds. Ask about review criteria, but do not assume a reserve will be reduced or removed by a particular date unless the written terms establish that outcome.

Common questions