Reserves are required to ensure that merchants have adequate funds to cover chargebacks and refunds from your customers. The size of the reserve is based on the level of risk associated with your business.

A reserve is a temporary hold on a portion of a merchant’s funds for a predetermined period of time. The function of a reserve is to ensure that when a customer initiates a refund or a chargeback, the customer can receive their funds in a timely manner. Customer refunds and chargebacks are pulled directly from the merchant’s reserved balance. Qashier holds these funds to protect end customers against unexpected settlement difficulties and ensure that our users can continue to accept payments with Qashier.

Reserves do not affect a merchant’s ability to continue accepting payments with Qashier, so merchants will still be able to continue operating as normal.

Before we place a reserve, we send merchants information about the reserve terms, the percentage of the funds that will be held and the time period for which the reserve will be applied. Normally, this is 60 to 120 days to allow time for customer refunds and chargebacks to be processed. Reserves are a common industry practice used by payment processors to ensure that merchants are able to cover chargebacks and refunds from their customers. Funds held in reserve will be paid out as soon as possible once the reserve term has ended (minus any customer refunds or disputes that may have been covered by the reserve).

As a licensed payment processor / payment institution, Qashier is responsible for the chargebacks and refunds that arise when businesses take payments from their customers, but are unable to fulfil their orders. When disputes occur, the payment amount, along with any additional dispute fee levied by the card network, is usually deducted from a merchant’s account balance.

However, it is possible that the funds in the account might not be sufficient to cover any disputed amounts. To avoid such situations, we place reserves to cover any expected future disputes. The reserve exists to cover anticipated losses. If there are none, the reserve is lifted. We understand that this process can be painful, but this ultimately helps to protect both our user's business and the customer.

The size of a reserve is determined based on the level of risk associated with any business. Risk in payments often comes down to the potential for incurring losses through disputes that the business may not be able to cover. We continuously monitor the account of each business that works with Qashier and assess a range of factors, including industry conditions, payment activity, dispute rate, refund rate and financial stability, amongst others, when calculating the level of risk.

These factors may indicate that a business has an elevated risk of customers requesting refunds or disputing payments, or that the business may have operational or financial difficulty in fulfilling customer orders. For example, if a business does not have enough funds in its Qashier Account Balance, refunds to customers might be delayed. We establish an appropriately sized reserve to help ensure that sufficient funds are available to cover future refunds or disputes.

A reserve may be placed on an account because we've determined that the business presents an increased level of risk. This may be due to a number of reasons, including, but not limited to the following:

We'll notify merchants by email if and when we need to apply a reserve. You can also check the status of your reserve through QashierHQ here.

When a reserve is applied to a Qashier account, we'll send an email with information about the terms of the reserve, including the amount or percentage of funds that will be held, and the time period for which the reserve will be applied.

A few days before a reserve is set to expire, we conduct another credit review of the account to determine if the reserve should be removed, decreased or increased. The decision to update the reserve depends on the business' financial health, the number of refunds and disputes on the account, and several other factors that affect the risk profile.

In some rare cases, a reserve may be required indefinitely to support a merchant’s business with Qashier.

A few days before a reserve is set to expire, we conduct another credit review of the account to determine if the reserve should be removed, decreased or increased. Unfortunately, if after completing this review, we continue to see an elevated level of risk, we may need to extend the reserve on the account.

The decision to update the reserve depends on the business' financial health, the number of refunds and disputes on the account, and several other factors that affect the risk profile. To learn more about how you can lower your risk factors, please see the question below.

Here are some ways to manage risk, prevent disputes and generally keep your business in good health:

Reserved funds are intended to ensure that there are funds available to cover refunds and disputes on an account. If a transaction is refunded or disputed, its corresponding reserve will be released and used to cover the refund/dispute immediately. Reserve funds will be released in full at the end of the reserve period if they are not needed to cover disputes or refunds.

Qashier mainly uses rolling reserves.

With a rolling reserve, a set percentage of funds from each new transaction is held in reserve on a rolling basis (e.g. 4-month rolling window). As individual transactions move beyond the time window, any reserved funds from those transactions will be released to the account's available balance and made available for the next payout.

In the example below, a Singapore-based business has a 25% reserve and a rolling release window of 4 months (~120 days), with a standard payout timing of one working day: