Calculating rolling reserves

Purpose

PSPs withhold a percentage of each transaction as protection against chargebacks and fraud disputes. That capital sits outside your control for weeks or months, often across multiple PSPs with different rates and holding periods. Without a systematic view, it’s hard to accurately forecast cash flow, verify if PSPs are releasing reserves on schedule, or have a reliable figure for how much working capital is tied up at any point.

This workflow ensures complete visibility over withheld capital and accurate cash flow forecasting by:

• Computing the reserve amount and release date for every transaction using contracted rules
• Tracking the total reserve balance outstanding per PSP, currency, and period
• Producing a forward-looking release schedule so treasury can plan around incoming reserve releases

Data sources

1. PSP transactions: Settlement-level export from each PSP for the period
2. Reserve rules: Contracted reserve terms per PSP

Key processing steps

1. Transaction normalization

Transaction reports from each PSP are standardized into a single consistent format before any reserve logic is applied. Date formats are parsed and unified and PSP name values are normalized to a canonical identifier.

2. Reserve rule matching

Each transaction is joined to its PSP's contracted reserve terms using PSP name and settlement date. Transactions with no matching rule are flagged and excluded from calculations.

3. Reserve calculation

For each transaction, two values are calculated:

• Reserve amount: the portion withheld by the PSP
• Release date: the earliest date the PSP is contractually required to release the withheld amount

4. Reserve aggregation

Transaction-level reserve records are rolled up into period summaries grouped by PSP, currency, and release date. The total reserve balance outstanding is calculated per PSP and in aggregate.

5. Release schedule

Upcoming reserve releases are bucketed by release week and month to produce a forward-looking cash flow schedule. Each bucket shows the total amount releasing, the PSP it originates from, and the currency.

Outputs

1. Reserve balance report: Total capital currently withheld per PSP and currency, with a combined aggregate figure. Includes a breakdown by holding period age bucket.
2. Release schedule: Forward-looking cash flow schedule showing reserve releases by week and month grouped by PSP and currency.

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