To ensure that your business can accept payments without interruption Paylike creates a reserve for your account. A percentage of the transactions will be held in reserve to cover:
Paylike uses, in most cases, a so-called rolling reserve which means that no security or guarantees are required up front before starting to accept payments. Instead, you build up a reserve to cover unforeseen expenses such as the ones listed above.
An example could be a rolling reserve in which 5 % of the total transaction volume is held for 80 days.
If you have EUR 100 in sales day 1, we will hold EUR 5 and release it on day 81, day 2 you have EUR 100 in sales of which we will hold EUR 5 and release it on day 82 and so on.
Most merchants will have a settlement delay of 2 days, meaning, the transactions made the prior two days to a payout is added in your reserve.
A transaction can be disputed for up to 14 months after it was captured. Meaning, if you receive a settlement of a transaction prior to 14 months, Paylike is extending you a line of credit for up to 14 months.
Therefore, we do a credit risk assessment to determine what our credit risk is for your business. If you have an established company with a good credit rating, you will have a small reserve in the beginning and sometimes eventually none.
If your business is new, it is difficult to assess it. Most new, low-risk businesses, will have a rolling reserve of 5 % of the last 80 days sales as shown in the example above.
Some merchants in high-risk fields (see restricted businesses), e.g. gambling, adult or bitcoins, will have a higher reserve because of increased risk of disputes, fines from Visa and Mastercard and so on. If you believe you are in this segment, please contact us before starting to accept payments.