Quote:
Originally posted by rhymer11@Jan 9 2005, 11:01 AM
Maybe someone from an aggragator could explain what exactly happens to the rolling reserve that is supposedly to be used as charge back protection. Or anyone else who has any insite into the inner workings of IPSP's.
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Who do you think holds the aggregators funds? The bank does, just like they do with anyone else's merchant account. An SMID is akin to a TID without a MID, something that is occasionally done for small volume merchants who want an account but don't have the volume to justify a bank assigning them both MIDs and TIDs. If the aggregators account is frozen or terminated, the bank stops sending them funds until their contracted reserve period has ended, and many times they still roll the funds through for months to pay the merchant account holder the balance due after credits and chargebacks are accounted for -- closing an account doesn't mean that those two things stop coming in, quite the opposite in fact.
The fact that you have no affiliate program makes a drastic difference on how your account fares, whether you realize it or not. Even the most well meaning of affiliates has a tendency to "overmarket" the program in order to make sales, and even if those surfers don't turn into chargebacks, they do turn into higher credits. Most every bank I know of has instigated credits as a percentage of sales into allowable ratios as well, since Mastercard reserves the right to fine on credits if they determine they are being issued solely for the sake of avoiding a CDC initiation.