A rolling reserve (also known as a rollover reserve, refundable reserve, or contingency reserve) holds between 5-10% of total approved gross transactions. It is held in escrow for six months by DalPay Retail's acquiring banks and then refunded to the account of the DalPay Retail supplier.
The rolling reserve is returned every week, 28 weeks after the reserve amount was taken, and is automatically included in the usual bank wire sent on the next settlement day.
DalPay is not an e-wallet, instead providing a merchant account alternative. This means that customers do not have to register for a DalPay account to buy your products and services.)
Purpose of the Rolling Reserve
These funds are held by our acquiring banks to indemnify the acquiring bank and DalPay against chargebacks, and fines due to claims for non-delivery of goods or services, returns on pre-paid yearly fees, etc.
The funds held by the acquiring banks in the reserve will accrue no interest, or other earnings to the merchant, and are a security deposit against misuse, and allow DalPay and the acquiring bank to underwrite your account.
If you close your account or it is terminated by DalPay, the reserve is refunded 180 days from the date the account was terminated according to the DalPay Retail Supplier Agreement.
Factors that influence Reserve Levels
- Your monthly chargeback ratio and monthly refund ratio,
- Your average ticket size on sales (more than USD 300/GBP 200/EUR 200/JPY 30,000/RMB 2000 per sale will mean a reserve of 10%)*,
- The nature of the product/services being sold; restricted items for example will generally accrue a reserve of 10%,
- The main countries sold to (for example high risk countries will attract a higher reserve)**,
- The time that it takes until a service has been delivered to the customer (i.e. subscriptions and memberships).
The percentage rolling reserve held can be adjusted downwards at the sole discretion of our acquirers based on recommendations from our risk department after at least 6 months of sales if:
- You are selling tangible products,
- Your monthly chargeback ratio is below 0.5%,
- Your monthly refund ratio is below 1%,
- Your average ticket size is consistent and below USD 300/GBP 200/EUR 200/JPY 30,000/RMB 2000 per sale*,
- You have signature proof of delivery and/or authorization forms from the customer.
*Because of the underwriting risk, and fact that fines are imposed by acquiring banks based on both the monthly chargeback to sales ratio as well as the chargeback to transaction ratio, higher ticket sizes will attract a higher reserve due to the greater financial risk to DalPay and the acquiring bank.
**Unlike many payment providers we will consider Suppliers with a majority or all of their customers in high risk countries such as Belarus, Egypt, Ghana, Kosovo, Indonesia, Lebanon, Macedonia, Moldova, Montenegro, Morocco, Pakistan, Romania, Serbia, Ukraine and Viet Nam. Additional due diligence, reserve and security measures will apply.
Last Updated: July 1st, 2010.