Deposit Activity for Merchants with a Negative Reserve Balance

As deposits come in from the merchant, the system applies them to any negative reserve balances held by departments, in order of their Department Priority setting.

A priority number to determine the order in which the department will collect reserve funds relative to other departments.

For example, a department with a priority of 1 will collect the designated amount first before any other departments collect. A priority 2 department will collect the designated amount from the remaining balance after the priority 1 department has collected. A priority 3 department will then collect the designated amount from the remaining balance after the departments of priority 1 and 2 have collected, and so on.

Changing the priority of one department will reorder the other department priority numbers accordingly.

Note: If the ACH Deposit Cap is selected when setting a reserve, the ACH Deposit Cap field can only be populated for a department set with a priority of 1.

If a department has a negative reserve balance, the deposit amount is applied to adjust the balance. The system cycles through the departments until the full deposit amount has been applied or no departments with a negative reserve balance remain.

For example, if a department has an existing reserve balance of ($500) and the incoming deposit is $200, the deposit is applied to the department's reserve balance, making the new reserve balance ($300).

After satisfying all negative reserve balances held by departments, any remaining deposit amount is processed through the normal Reserve Funding process as configured.

This chart outlines the incoming deposit workflow for merchants with a negative balance: