What Businesses Should Have Merchant Account Reserves?

Let’s start with the definition of a merchant account reserve. A merchant account reserve is a part of your revenues from your payment card transactions which is held by the bank in an escrow account as a protection against money losses caused, for instance, by chargebacks. The merchant account reserve amount and period are calculated by acquirers for every specific case depending on the risk level.

You have probably guessed that businesses classified as high risk according to their nature are required to have merchant account reserves, for example, travel agencies, diet programs, prepaid card sellers, etc. Usually merchants who do not have any prior processing history also need to have reserves while acquirers want to see their behavior and check whether they are reliable enough.

There are some types of businesses which will not be able to open merchant accounts even if they agree to have merchant account reserves. It is most likely that the following businesses will belong to this category: lotteries, gambling businesses, escort services, online tobacco sellers, credit repair company, etc.

That’s why you need to know that there are a lot of factors which you need to analyze carefully before applying for a merchant account and the risk level is considered to be a significant aspect (more information is available in the article here). If you have some other questions related to payment processing industry you can visit payment advice section at #UniPayGateway.

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Enterprise-scale, open-source, #PaymentProcessing solutions for #Merchants, #PayFacs and PSPs. For more information, visit UnitedThinkers.com

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