Maintain a reserve balance

Whether you have configured automatic settlements or manage them manually, you can specify a minimum balance that should remain in the Connect account after the settlement is completed, so that you can reserve funds for future refunds or payouts.

After each settlement batch is calculated, Connect will add an adjustment, if required, to ensure that the reserve balance is maintained.  All payments included in the batch are still marked as SETTLED.

You can set up a Reserve Balance by letting us know the minimum amount that should remain in the Connect account after each settlement is completed.  Each Connect account can have its own configurable reserve balance.

To set up or change your reserve balance, please contact support@volt.io and we’ll make the change for you.  We’ll have options in Fuzebox soon so that you can manage this yourself.

Our example merchant has configured a reserve amount of 600.00 EUR for their Connect account.  We’ll run through the first three settlement batches since the reserve balance was applied, starting from a zero balance in their Connect account.

SETTLEMENT BATCH #1

Here we have 3 new payments and a refund which have been processed since the last batch.  We’ve just configured the reserve balance of 600.00 EUR to be applied to this Connect account but at the moment, there’s a zero balance for the account.

Batch details

• Payment A: +1000.00 EUR (status: RECEIVED)
• Payment B: +1500.00 EUR (status: RECEIVED)
• Payment C: +2000.00 EUR (status: RECEIVED)
• Refund X: -500.00 EUR (status: CONFIRMED)

Meaning there’s a net cash movement, and provisional settlement amount, of +4000.00 EUR in the account.

Before settlement

• The Connect account balance has increased to 4000.00 EUR

After settlement

• If we sent the entire provisional settlement amount, we’d end up with less than the reserve balance in the Connect account.  Therefore, to maintain the reserve balance we’ll apply a reserve adjustment of -600.00 EUR to the settlement.
• This means that a total of 3400.00 EUR will be swept to the merchant’s external bank account.
• And the Connect account balance will now contain the reserve amount of 600.00 EUR.
• Payments A, B and C will be marked as settled.

SETTLEMENT BATCH #2

Since the last batch we’ve had 3 new payments and another refund.  We have our reserve balance of 600.00 EUR in the account from BATCH 001.

Batch details

• Payment D: +3000.00 EUR (status: RECEIVED)
• Payment E: +1000.00 EUR (status: RECEIVED)
• Payment F: +2500.00 EUR (status: RECEIVED)
• Refund Y: -500.00 EUR (status: CONFIRMED)

The net cash movement, and provisional settlement amount, since the last batch is  +6000.00 EUR.

Before settlement

• The Connect account balance has therefore increased to 6600.00 EUR

After settlement

• If we settle the full provisional settlement amount of 6000.00 EUR, we’ll still have our full reserve balance in the Connect account, so no adjustment is required this time.
• Which means that the full settlement total of 6000.00 EUR will be swept to the external bank account
• And the Connect account balance will still contain the reserve amount of 600.00 EUR
• Payments D, E and F will be marked as settled

SETTLEMENT BATCH #3

In this batch, there are more settlements than payments, meaning that the net cash movement that’s happened is negative.  Luckily the merchant had enough in their reserve balance to cover all the refunds.

Batch details

• Refund Z: -300.00 EUR (status: CONFIRMED)
• Refund Q: -300.00 EUR (status: CONFIRMED)
• Payment G: +500.00 EUR (status: RECEIVED)
• Refund W: -200.00 EUR (status: CONFIRMED)

Meaning there has been a net cash movement, and provisional settlement amount, of -300.00 EUR since the last batch was sent.  

Before settlement

• Therefore the Connect account balance has actually decreased to 300.00 EUR, which is below the reserve balance the merchant configured.

After settlement

• We can’t send a negative amount, therefore we need to make a reserve adjustment of +300.00 EUR to the merchant’s provisional settlement amount, making it 0.00 EUR
• This means we’re not actually sending anything to the merchant’s external bank account this time.
• And the Connect account balance will still contain a balance of 300.00 EUR.
• Note that the payment (G) is still marked as settled, even though there was no settlement sent.

Reserve balance in the Settlement report

Your reserve balance will be reflected in the settlement report.  A new column called type will be added, which can have the following values: payout, transaction, refund, reserve adjustment.

In the Reserve adjustment row, you’ll see the figure that was deducted from your settlement amount to maintain the reserve balance.  If you reduce or remove the reserve balance, any remaining funds will be sent to you in the next settlement.

Download example Settlement report

Reserve balance in the Connect report

Your reserve balance will also be reflected in the Connect report.  A new row, with a transactionType value of RESERVE_ADJUSTMENT, will be added when appropriate.

In this row, the batchId column will include the identifier of the specific Connect settlement that was adjusted.

The adjusted amount will be reflected in the amountNetDebit and amountGrossDebit columns, representing the amount deducted from your settlement balance due to the reserve balance.

If you reduce or disable the reserve balance, any remaining funds will be added to your next settlement and the amount will appear as a credit in the amountNetCredit and amountGrossCredit columns.

Download sample Connect report