If you’re processing payments in a regulated or elevated-risk industry, there’s a good chance your payment processor is holding a percentage of your revenue in reserve. For many merchants, this is one of the most frustrating aspects of high-risk processing and one of the least clearly explained.
This guide covers exactly how merchant reserves work: why they exist, how percentages are set, what triggers an increase, what triggers a release, and how to manage your business’s cash flow around them.
Why Reserves Exist
Payment processors bear financial liability for the merchants they process. When a merchant generates chargebacks, the processor is responsible for covering those funds if the merchant can’t. For merchants in high-risk categories, supplements, telehealth, peptides, subscription products, the statistical likelihood of elevated chargebacks is higher than for standard eCommerce merchants. Adyen requires that processors serving these categories maintain reserves against that risk exposure.
The reserve is your money. It is held, not taken. When your account operates cleanly over time, the reserve is released back to you.
How Reserve Percentages Are Set
Industry and product category. Some categories carry higher baseline risk. A peptide company or telehealth platform will typically carry a higher initial reserve than standard retail.
Processing volume. Larger monthly volumes mean larger absolute exposure. Reserve sizing needs to reflect the dollar exposure.
Chargeback history. A clean record with demonstrated low dispute rates can result in lower initial reserves or faster release schedules.
Business model maturity. New accounts typically start with higher reserves that step down as the account demonstrates stable processing.
Acquirer requirements. Adyen sets certain baseline reserve requirements for specific merchant categories that processors must implement.
Typical reserve ranges for high-risk categories through ConvesioPay: 10–20% of ongoing processing volume, with some accounts starting higher. The specific percentage for your account is communicated during onboarding.
Rolling Reserves vs. Upfront Reserves
Rolling reserve. A percentage of each settlement is withheld for a defined period, typically 90–180 days, before being released on a rolling basis. You consistently have held funds, but you also consistently receive releases as each tranche matures.Upfront (capped) reserve. A fixed total amount is required before payouts begin, or revenue is withheld until a cap is reached. Common for new accounts or accounts with limited processing history.
What Triggers a Reserve Increase
Rising chargeback ratio. If your dispute rate climbs, your processor may increase the reserve percentage to maintain adequate coverage.
Sudden volume spikes. A large unexplained increase in processing volume raises absolute dollar exposure, even if the percentage rate stays the same.
Compliance issues. LegitScript flags, Adyen compliance inquiries, or other compliance events may result in temporary reserve increases while the situation is resolved.
Adyen directives. Adyen may direct processors to increase reserves on specific merchant categories based on their own risk assessment.
What Triggers a Reserve Release
Scheduled releases. Rolling reserve tranches release automatically after the hold period matures. If you’re on a 90-day rolling reserve, releases begin approximately 90 days after your first settlements.
Discretionary releases. Requesting a release after 6–12 months of clean processing — low chargebacks, no compliance flags, consistent volume — with supporting documentation of your performance.
When requesting a release, provide: your chargeback ratio over the most recent 3–6 months, your refund rate, any LegitScript certification or compliance documentation, and a description of operational improvements you’ve made.
Managing Cash Flow Around Reserves
- Build reserves into your cash flow model from day one, model on the assumption that the held percentage is not accessible until released
- Understand your release schedule before you need the funds
- Reduce chargebacks proactively, every percentage point reduction improves your profile for reserve reductions
- Communicate with your processor early if you’re approaching a cash flow crunch
What Happens to Your Reserve If Your Account Is Terminated
The reserve does not immediately return. It remains held during the dispute liability period, typically 120–180 days after your last transaction, to cover any chargebacks that may arrive after processing ends. In cases with elevated dispute rates at termination, the reserve period may be extended.
If your account is terminated and you have a reserve balance, your processor should provide a clear timeline for when held funds will be released after disputes are resolved.
The Bottom Line
Merchant reserves are a standard feature of high-risk payment processing, not an arbitrary penalty. The merchants who navigate reserves most successfully are the ones who understand the structure from the start, build it into their cash flow model, and treat chargeback reduction as an ongoing priority.
If you have questions about your reserve structure, your release schedule, or how your reserve rate was determined, reach out to the ConvesioPay team directly. This is information you’re entitled to understand clearly.