Reserve plan
A reserve is a temporary hold on a portion of your funds for a predetermined period—a common industry practice to ensure that your business is able to cover disputes and refunds from customers. It's intended to cover any anticipated losses that may result from processing activity. Reserves do not affect your ability to continue accepting payments with Airwallex.
As a payment processor, Airwallex is responsible for the disputes and refunds that arise when businesses process payments from customers but are unable to fulfill orders. When disputes occur, the payment amount, along with any additional dispute fee levied by the card network, is usually deducted from the 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, to protect both you and your customers.
Reserve amount calculation
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 Airwallex and assess a range of factors, including industry conditions, payment activity, dispute rate, refund rate, and financial stability, among others, when calculating the level of risk.
Reserve plan types
Airwallex currently offers the following reserve plan types:
| Delayed settlement | Rolling reserve | Mixed reserve | |
|---|---|---|---|
| Description | The full amount of each transaction is held and settled to your account on a fixed number of days after the transaction takes place. | A percentage of the transaction amount is held for a fixed period of time. | A combination of delayed settlement and rolling reserve. All funds are held for a fixed period of time and a percentage of funds is held for additional days after the transaction. |
| Example | 5 days delay:
| 10% held for 30 days:
| 90% held for 10 days, remaining 10% held for an additional 30 days:
|
In addition to the reserve types above, Airwallex may also impose a fixed reserve—a set amount of funds withheld—if there is a significant change in your credit risk exposure.
Reserve offer notification
After Airwallex reviews your application, you will be notified that a reserve proposal is ready to be accepted. To accept your reserve, you will need to either click the link in the notification email or log in to your account and navigate to Payments to complete your application. From there, you will be able to review your reserve offers and accept an appropriate reserve offer based on your business needs.
You can view the details of your current reserve plan anytime by logging in to the Airwallex web app and navigating to Payments > Settings.
FAQ
Why do funds take longer to settle than the T+X reserve period?
Different payment methods have different settlement schedules apart from the reserve plan. You can see the settlement schedule in each payment method page, for example, Airwallex Pay.
Reserves act as a gatekeeper primarily for disputable payment methods such as cards and direct debits.
If your account has a reserve plan, funds from disputable payment methods will only become usable after the reserve period or the settlement period of the chosen payment method, whichever is longer.
For non-disputable payment methods, for example, some bank transfers and local payment methods, the settlement time is usually just the method's natural processing time; reserves typically do not apply.
- Scenario 1 (disputable): You accept a card payment (T+2) but have a 7-day rolling reserve. You receive funds on Day 7.
- Scenario 2 (non-disputable): You accept an LPM payment (T+11) with no reserve. You receive funds on Day 11 (the payment method's natural processing time).