Overview

The following article outlines program reserve requirements and if applicable, automated debiting requirements and the differences between the two.

Reserves

Unless stated otherwise, all Astra clients are contractually obligated to maintain reserves with Astra. This amount, determined prior to the launch of a program's integration, are funds held in a dedicated For-Benefit-Of (FBO) Reserve account, sponsored by Astra's Partner Bank.

Why Does Astra Require Reserves?

As part of our go-live review and platform risk control processes, reserves serve as a financial safety net to cover a program’s obligations and exposures that may arise from its transaction activity. They protect against:

• ACH Returns: Particularly unauthorized transaction returns (R10) which can occur up to 60 days after a transaction

• Chargebacks: Which can be filed up to 120 days after a transaction

• Negative Balances: When automated debiting from your corporate account fails as a result of R29s or R01s. In addition, negative balances can be incurred through unpaid invoices.

How Are Reserve Amounts Calculated?

Reserve requirements are generally determined based on the following factors: 

• Transfer Limits: The amount of money your program is requesting per-transfer

• Program Maturity: Years in business, size of company, liquidity, etc.

• Use Case Risk: The relative risk associated with your payment solution

• Volume Projections: Your current and projected transaction volumes

Reserve amounts typically remain stable unless there's a significant uptick in returns or your program requests higher per-transfer limits.

How Automated Debiting Works

Automated debiting is Astra's settlement automation system that handles ongoing operational costs. This system automatically debits your designated corporate bank account for:

1. Interchange & Network Fees: Debited daily for the sum of all fees incurred through debit card transactions, which contractually are pass-through fees.

2. Lost Chargebacks: Debited on an as-needed basis when chargebacks reach a final state of lost resulting in a negative balance for your program.

3. ACH Returns: Debited on an as-needed basis when an ACH Transfers results in a return code, such as an R10, resulting in a negative balance for your program.

Key Differences Between Reserves and Automated Debiting

When Are Reserves Actually Used?

With automated debiting properly configured, reserves serve as a financial backstop and are rarely accessed. Reserves may be debited when amounts owed cannot otherwise be collected, including for returns, chargebacks, unpaid invoices, negative balances, or other amounts permitted under your agreement with Astra. Examples include

• Automated debiting from your corporate account fails (e.g. an R29, R01)

• There are exceptional circumstances requiring immediate settlement (e.g. fraud incidents, unpaid invoices)

Reserve Release

In the event a program exits their contractual obligation, Reserves are scheduled to be released after the applicable payment return and chargeback windows have cleared and outstanding program obligations have been resolved. The timing may vary based on your program's payment activity::

• For ACH: 60 days after the last transaction (R10 window)

• For Chargebacks: 120 days after the last transaction (chargeback window)

Astra will request account details for relinquishing your reserves. Your team will receive notifications and supplemental reporting if the full reserve amount cannot be relinquished. This usually occurs if there are outstanding invoices or negative balances that could not be healed via auto-debiting. All fund movements are documented via the Payment Instrument table in your Astra Dashboard, with downloadable statements and CSVs available for reconciliation.