What is a rolling reserve?
You process a payment, check your balance, and notice the full amount isn’t available yet. Instead, you see a line item called “Rolling Reserve,” and think: Why is Mamo holding my money?
If you’re seeing that for the first time, it can feel alarming. But a rolling reserve is not a penalty or a warning that something is wrong, it’s a standard practice across the payments industry.
At Mamo, rolling reserves are used to help protect merchants and customers from chargeback risk. These reserves are also a requirement of operating as a regulated payment provider in the UAE.
In this guide, we’ll explain:
- What a rolling reserve is
- Why payment providers use them
- How rolling reserves work at Mamo
Transparency about how your funds work is a core part of how Mamo operates.
Rolling reserve meaning
A rolling reserve is a percentage of each transaction that is temporarily held before being released back to the merchant after a set period of time.
The money is held as security, then released back on a rolling schedule.
For example:
- Funds held from Week 1 are released in Week 27
- Funds held from Week 2 are released in Week 28
- Funds held from Week 3 are released in Week 29
As new reserves are added, older ones are continuously released back to the merchant.
These ongoing reserves are applied to businesses operating in industries with higher chargeback risk, including:
- Travel
- Subscription businesses
- Marketplaces
- Event ticketing
These industries have longer fulfillment timelines or higher dispute rates, which increases payment risk across the industry.
A rolling reserve works like a rental deposit. Funds are temporarily held as protection while the risk window remains open, then returned once that period ends.
Why payment providers use rolling reserves
Rolling reserves exist because of chargebacks.
When a customer disputes a payment, the payment provider is financially responsible for covering the costs of that dispute. A reserve ensures there are funds available if a chargeback occurs.
Visa and Mastercard give cardholders up to about 6 months to dispute a transaction. That’s why rolling reserve periods at Mamo are typically around 26 weeks, which also align with DFSA compliance.
This timeline aligns with:
- Card scheme dispute windows
- UAE regulatory expectations
- DFSA compliance requirements
Mamo is not the only one with this approach.
Stripe, Checkout.com, Adyen and other regulated payment providers all have some form of reserve structure for higher-risk merchants.
At Mamo, reserves are designed to help keep merchant accounts operational and protected when unexpected disputes happen. It’s a safeguard for merchants and customers.
How Mamo's rolling reserve works
Rolling reserves at Mamo are typically:
- 10–25% of each transaction
- Held for approximately 26 weeks
- Calculated before fees are deducted
The exact reserve percentage depends on the merchant’s business model, industry, chargeback exposure and risk profile.
Here’s a simple example:
→ A merchant processes AED 10,000 in payments during Week 1.
→ If the reserve rate is 10%, AED 1,000 is placed into a rolling reserve.
→ That AED 1,000 is then released back to the merchant in approximately Week 27.
Meanwhile:
→ Week 2 transactions generate new reserve amounts
→ Week 3 transactions generate new reserve amounts
→ Earlier reserve balances continue releasing over time
It’s important to note that reserved funds cannot be settled to a bank account, used for payouts or card top-ups or released early.
The 26-week release period is mandatory and tied to card scheme and regulatory requirements. Even accounts with strong performance cannot access reserved funds before the release window ends.
Tracking your rolling reserve in the Mamo dashboard
Rolling reserve activity is fully visible inside your Mamo dashboard. You can track reserves from your Finances balance sheet and settlement statements.
There are two key line items to look for:
- Rolling reserve - Funds currently being held from recent transactions.
- Rolling reserve released - Funds returning from reserves held approximately 26 weeks earlier.
This gives merchants full visibility into what’s currently reserved, what has already been released and when reserve funds are returning.
There are no hidden deductions or surprise holds. Reserve activity is visible, traceable and released on schedule.
[Placeholder: dashboard screenshot showing reserve line items]
Rolling reserves vs chargebacks
A common misconception is that chargebacks are automatically deducted from the rolling reserve balance. In most cases, they’re not.
Chargebacks are typically debited from the merchant’s main Mamo balance first.
The reserve is only used in specific situations, such as:
- The merchant account is closed and the main balance cannot cover outstanding disputes
- The account balance becomes negative and cannot cover chargebacks
For accounts in good standing and operating normally, the reserve often remains untouched for the full 26-week period before being released back to the merchant.
Can your rolling reserve be reduced or removed?
In some cases, yes. Mamo’s Risk team periodically reviews merchant performance and chargeback rates over time.
Merchants may become eligible for reduced reserve rates or reserve removal on future transactions.
To qualify, they must have:
- Low dispute ratios
- Strong account history
- Consistent processing behaviour
- No signs of fraud or abuse
While reserve percentages may change over time, reserved funds cannot be released early. The 26-week holding period remains mandatory under card scheme and regulatory requirements.
If you have questions about your reserve setup or review eligibility, you can also speak directly with the Mamo team.
Rolling reserve accounts are standard, transparent and temporary
Rolling reserves are a standard part of how regulated payment providers manage risk across the payments ecosystem.
The 3 most important things to remember are:
- A rolling reserve is not a penalty
- Reserved funds are released on a predictable schedule
- Strong account performance can improve reserve terms over time
As a DFSA-regulated payment provider, Mamo is committed to being transparent about how reserves work and why they exist.
If you’re looking for a payment provider built for growing businesses in the UAE, Mamo makes it easy to accept payments in minutes.
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