How Reserves Work in High-Risk Payment Processing
How Reserves Work in High-Risk Payment Processing
Understanding rolling reserves and how High Wire Payments helps minimize or remove them for merchants in industries like CBD and botanicals.
What Is a Reserve?
A reserve (or rolling reserve) is a percentage of each transaction temporarily held by your acquiring bank or processor. It acts as a safety net in case of chargebacks, fraud, or refunds. Once the reserve period ends—often 90 to 180 days—the held funds are released back to you.
How Reserve Amounts Are Determined
Reserves are determined either by the acquiring bank or, in some cases, by the processor’s internal risk department. The final decision depends on several key factors:
- Credit and financial stability: Merchants with strong credit and healthy bank balances are seen as lower risk.
- Product category: High-risk products (like supplements, crypto, or nutraceuticals) are more likely to see reserves than medium-risk verticals like CBD or botanicals.
- Processing history: The longer your account has clean processing volume and low chargebacks, the less likely a reserve will be required.
- Chargeback ratio: Consistently low dispute activity builds trust with underwriting teams and can lead to reserve release requests sooner.
How High Wire Payments Handles Reserves
At High Wire Payments, reserves are not automatically applied. During the underwriting stage, our team reviews your business model, history, and financials before presenting your file to the bank. If a reserve is requested, we will actively advocate against it on your behalf—often preventing it entirely for medium-risk merchants.
✅ 90% of High Wire Payments merchants have no reserve at all. Especially in industries like CBD, botanicals, and wellness, we work closely with our bank partners to secure clean approvals without unnecessary holds.
Requesting Reserve Release After 90 Days
If a reserve is initially placed, High Wire Payments will monitor your account performance and, after 90 days of clean processing history, formally request the reserve release from the acquiring bank. Our team prepares a compliance and performance summary to support this request, which helps demonstrate your reliability and reduces future holdbacks.
Why Reserves Exist
While reserves can feel frustrating, they exist to protect all parties involved in payment processing. They help ensure customer refunds or chargebacks can be covered without disrupting cash flow for the bank or processor. At the same time, they’re not meant to be permanent—High Wire’s goal is to shorten or eliminate them as soon as possible.