Glossary
Rolling reserve
A rolling reserve is a share of each day's card sales that a payment processor holds for a set period before releasing it.
What it means
The processor keeps a percentage of every settlement in a reserve account as cover against chargebacks and refunds. Each day's held amount is released when its holding period ends, while new sales keep adding to the reserve, so it rolls forward. Processors usually set the percentage and the period at underwriting, based on the merchant's industry and chargeback history.
Prop firms are usually treated as high risk merchants, so a rolling reserve is a normal part of their card processing. It ties up cash in the first months, which a launch budget should plan for. Founders should confirm the percentage, the holding period, and whether the terms can be reviewed after a clean record.
Worked example
Illustrative numbers: a firm takes $40,000 in card sales in its first month, with a 10% rolling reserve held for 180 days. It receives $36,000, less processing fees, and $4,000 is held. That $4,000 is released about six months later, while each new month's sales add to the reserve.
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