Reserve plan
What is a reserve plan?
A reserve is a temporary hold on a portion of your funds for a predetermined period of time. More detail on the different types of reserves are covered below. They are intended to cover any anticipated losses that may result from processing activity. It is a common industry practice, to ensure that your business is able to cover disputes and refunds from customers. Reserves do not affect your ability to continue accepting payments with Airwallex.
Why are reserves necessary?
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.
How are reserve amounts calculated?
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.
What are the different types of reserves Airwallex offers?
Airwallex currently offers the following types of reserves:
Delayed settlement
The full amount of each transaction will be settled to your account on a fixed number of days after the transaction takes place.
Example: 5 days delay:
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On day 0, your customer places an order for $100. The $100 is held in your reserve account with Airwallex
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On day 5, the funds are released to your account for use
Rolling reserve
A percentage of the transaction amount is held for a fixed period of time.
Example: 10% of funds held for 30 days:
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On day 0, your customer places an order for $100. $10 (10%) is held in your reserve account with Airwallex
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Once the funds are received from the underlying card scheme/ payment method then you will receive $90 immediately for use. The timing for this follows the settlement schedule detailed in the detailed page of each payment method's product doc page.
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30 days after the settlement date (usually 32 to 33 days from the order being placed) you will receive the remaining $10.
Mixed reserve
A combination of delay and rolling reserve plans. All funds will be held for a fixed period of time and a percentage of funds will be held for additional days after transaction
Example: 90% of funds held for 10 days and the remaining 10% of funds will be held for additional 30 days
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On day 0, your customer places an order for $100. The $100 is held in your reserve account with Airwallex
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On day 10, 90% of the funds are released to your account for use
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On day 40, you will receive the remaining $10.
In addition to the reserve types mentioned 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.
My reserve is T+X, why are my funds only reaching me after a longer period?
Different payment methods have different settlement times apart from the reserve plan. Depending on the payment method your customer used to make payment, the funds will only reach your Airwallex wallet after the number of days given for the reserve plan or the settlement period of the chosen payment method, whichever comes first.
How do I choose my reserve plan?
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 login to your account and navigate to the Payments section to complete your application. From there, you shall be able to review your reserve offers and accept an appropriate reserve offer based on your business needs.
Where do I view the details of my reserve?
You can view the details of your current reserve plan at any time through the "Settings" tab in the Payments section of your Airwallex account.