What is the reserve on Cartpanda Pay?
When accessing the Cartpanda Pay dashboard, you may have come across the "Reserved Balance" field. Want to know what it means and how it works?
We're going to break it down in a simple and straightforward way. Let's dive in!
A percentage of all orders processed through Cartpanda Pay is placed into a reserve. This reserve acts as a special balance used to cover potential future chargebacks.
In other words, this balance will be used to cover any negative balances applied to your account.
Keep in mind that refunds or chargebacks are automatically deducted from your available balance, and the reserved balance is transferred to your available balance once the retention period ends.
The reserve balance is held for 90 days after being added to your account. After this period, it is automatically transferred to your available balance for withdrawal.
Each order has its own individual release date.
For example, if you make a sale today, it will be released from the reserve in 90 days. If you make another sale tomorrow, that sale will also be released in 90 days, independently of the first one.
The standard reserve rate is 5% (domestic transactions) and 10% (international transactions) per order, automatically deducted from all sales. However, after a certain period of using Cartpanda Pay, you can request a renegotiation of this percentage.
Get in touch with your account manager to check the conditions for your business.
Yes, the reserve percentage is based on the health of your account. Cartpanda aims to keep your cash flow as smooth as possible by maintaining the lowest reserve percentage and offering the fastest payout time in the market ( D+2 for credit card transactions). This means that with Cartpanda, you'll typically have a lower reserve percentage and faster payouts compared to other platforms.
Now, let's consider a hypothetical scenario:
- Your reserve is set at 5%
- You've been processing payments with Cartpanda for one month
- Your refund rate is 3% and your chargeback rate is 2%
This means your entire reserve is essentially being used to cover refunds and chargebacks. If you stop selling entirely, your balance could go negative on the platform.
Even with a 5% refund/chargeback rate, Cartpanda won’t necessarily increase your reserve immediately because we prioritize keeping your cash flow running smoothly. However, if a merchant completely stops selling, a withdrawal request might be denied as a preventive measure.
Since:
- Refunds can be issued up to ~60 days after purchase
- Chargebacks can be issued up to ~180 days after purchase
If your refund/chargeback rate is 5%, stopping sales completely could lead to a negative balance, causing losses. To prevent this, our risk team may increase your reserve percentage to cover potential future chargebacks and refunds.
Instead of starting you off with a 15-20% reserve like other platforms, we chose to begin with a lower reserve and adjust it only if necessary over time.
We're going to break it down in a simple and straightforward way. Let's dive in!
What is the reserved balance?
A percentage of all orders processed through Cartpanda Pay is placed into a reserve. This reserve acts as a special balance used to cover potential future chargebacks.
In other words, this balance will be used to cover any negative balances applied to your account.
Keep in mind that refunds or chargebacks are automatically deducted from your available balance, and the reserved balance is transferred to your available balance once the retention period ends.
How long is the balance held?
The reserve balance is held for 90 days after being added to your account. After this period, it is automatically transferred to your available balance for withdrawal.
Each order has its own individual release date.
For example, if you make a sale today, it will be released from the reserve in 90 days. If you make another sale tomorrow, that sale will also be released in 90 days, independently of the first one.
What is the reserve percentage?
The standard reserve rate is 5% (domestic transactions) and 10% (international transactions) per order, automatically deducted from all sales. However, after a certain period of using Cartpanda Pay, you can request a renegotiation of this percentage.
Get in touch with your account manager to check the conditions for your business.
Can my reserve percentage increase?
Yes, the reserve percentage is based on the health of your account. Cartpanda aims to keep your cash flow as smooth as possible by maintaining the lowest reserve percentage and offering the fastest payout time in the market ( D+2 for credit card transactions). This means that with Cartpanda, you'll typically have a lower reserve percentage and faster payouts compared to other platforms.
Now, let's consider a hypothetical scenario:
- Your reserve is set at 5%
- You've been processing payments with Cartpanda for one month
- Your refund rate is 3% and your chargeback rate is 2%
This means your entire reserve is essentially being used to cover refunds and chargebacks. If you stop selling entirely, your balance could go negative on the platform.
Even with a 5% refund/chargeback rate, Cartpanda won’t necessarily increase your reserve immediately because we prioritize keeping your cash flow running smoothly. However, if a merchant completely stops selling, a withdrawal request might be denied as a preventive measure.
Since:
- Refunds can be issued up to ~60 days after purchase
- Chargebacks can be issued up to ~180 days after purchase
If your refund/chargeback rate is 5%, stopping sales completely could lead to a negative balance, causing losses. To prevent this, our risk team may increase your reserve percentage to cover potential future chargebacks and refunds.
Final Thoughts
Instead of starting you off with a 15-20% reserve like other platforms, we chose to begin with a lower reserve and adjust it only if necessary over time.
Updated on: 02/17/2025
Thank you!