If you’re looking for a payment processor that doesn’t hold funds, then you’re in the market for a high risk merchant account provider. These types of payment processors create custom accounts for multiple types of businesses. Each account has its own specific contract that can be adjusted to reduce funding holds.
Reserve Accounts
The location where your funds get held is a reserve account. The reserve is set in place in order to have extra money in the event something goes wrong. Banks control the money in the reserve account , and although a merchant can see how much is being held, they cannot access it until a bank decides to release it.
In most cases, reserve funds are predetermined in your initial merchant account contract. The bank chooses the amount during underwriting after assessing general risk factors associated with your existing payment processing history. In some cases however, they may freeze your account and halt transactions while holding the funds until they decide to release them.
