Why Your First Payout Can Be Smaller Than Your Sales

If your first payout is smaller than your sales, a reserve may be one reason. A provider can hold back a share of your sales and release it later, on the schedule in your terms. Refunds and fees come off before a payout. Reserve terms differ between agreements, so read them before you sign.

• A reserve is a share of sales that a provider may hold back for a period.
• Release happens later, on the schedule in your terms.
• Other differences: refunds and fees also make a payout smaller than sales.

This guide is the written companion to our short video on the same topic.

Why can a first payout be smaller than the sales?

A payout is not the same number as your sales. Before money reaches your bank account, your provider takes away refunds and fees, and it may hold back a share as a reserve. The first payout can feel smaller than expected because you may not have seen the terms that apply until the first report arrives.

To see each line, read our guide on how to read a settlement report in five lines.

What is a reserve?

A reserve is a share of your sales that a provider keeps for a period instead of paying it out straight away. Providers use it as protection against refunds and disputes that may arrive later. It is not a fee, because the held amount is meant to be released to you later, according to your agreement.

Our article on what a rolling reserve is and how held funds work explains the idea in more detail. We will not quote a typical share or period, because both differ between agreements.

How is the held share released?

The terms set when the held share is released. Some agreements release amounts in stages, and some release them after a set period. Your own agreement is the only reliable source. Look for the share that is held, how long it is held, and what can change either of them.

If you want the background on when money moves at all, read authorization, capture and settlement explained.

What should you ask before you sign?

Ask these questions before you agree to any terms:

• Is any share of my sales held back, and how much?
• For how long is it held, and when is it released?
• Can the amount or the period change, and what triggers a change?
• Where on the settlement report will I see the held and released amounts?

Write down the answers and keep them with your agreement. If something is unclear, ask for it in writing. If your terms have legal consequences in your market, have your own advisor review them.

Frequently asked questions

What is a reserve in card payments?

A reserve is a share of your sales that a provider holds back for a period and releases later, according to your agreement. It is meant as protection against refunds and disputes that may arrive after the sale.

Why is my payout lower than my sales?

Refunds and fees are taken from sales before a payout, and your provider may also hold back a share as a reserve. Read the settlement report line by line to see which of them explains the difference.

When is the held share released?

It depends on your agreement. Terms differ between providers, so check the schedule in your own terms and look for released amounts on your settlement report.

Is a reserve a fee?

No. A fee is kept by the provider, while a reserve is meant to be released to you later. Check your agreement for how each is described.

What should I ask a provider about a reserve?

Ask how much is held, for how long, when it is released, whether it can change, and where it appears on your report. Get the answers in writing before you sign.

Where to go next

EPaySe is a payment gateway in development for high-risk and regulated businesses, reviewed and approved case by case. If you have questions about your own setup, contact the EPaySe team.

This article is general information, not legal, tax or financial advice. Check with your own advisor before making decisions about your business.