What are PayPal Here™ Reserves?

An account reserve is an amount of money that is held in your PayPal account to cover potential risk of payment reversals you may receive, like chargebacks and claims.
Key-in and swipe transactions over certain monetary thresholds may be subject to an automatic reserve, in which funds will be temporarily held in your PayPal account to cover the high risk of fraud associated with these transactions. While held, these funds will be unavailable to you. For increased protection from fraud and to reduce the likelihood of funds being held, we recommend using a chip or contactless card reader. All PayPal accounts are subject to policies that can lead to account holds, limitations, or reserves. See the PayPal User Agreement.

For example, if you process a total of $600 in keyed-in or magnetic stripe transactions over a rolling 7-day period, $100 will be held for 30-days. If funds are held in reserve, you will be notified by email and provided details on when funds will be released. The reserve limit is subject to change.

Why do you place some PayPal Here funds received via key-in & magnetic stripe in reserve?

Keyed-in and magnetic stripe transactions are associated with higher incidents of fraud compared to chip and contactless transactions. Account reserves allow for a portion of money to be temporarily set aside to cover any payment reversals associated with fraudulent activity you may receive like chargebacks, claims, and disputes.

Will using a chip card reader prevent funds from being placed in reserve?

Processing chip or contactless transactions with the PayPal Chip Card Reader can minimize the likelihood of funds being placed in reserve. There are other factors that determine when funds are held in reserve. Accounts are evaluated on a case-by-case basis and a reserve may be placed on your account if there is a high level of risk associated with your account. For more information on account reserves please visit the PayPal Help Centre.

How do I know if my funds are being held in reserve?

You will be notified by email if any funds are held in reserve. Additionally, the amount being held in reserve can be found under ‘on hold’ in the money tab. From time to time, we may need to adjust your reserve amount. If that happens, we’ll email you about the changes.

How can I reduce my reserves?

If you have a PayPal Mobile Card Reader, to reduce the reserve on your account, you may consider upgrading to a more secure device. With an upgraded device, you can accept other transaction types, which are more secure, such as chip card. Alternative devices are available.