Early Hold Release is a solution that allows a merchant operating under a holdback arrangement to have its turnover, which is held pending release, paid out from the hold account when it needs cash.
Merchants can work with banks under 3 different terms:
- Commission-based
- Commission-based & Holdback
- Holdback
The early hold release process, the subject of today's article, can be carried out for merchant transactions operating under either Commission-based & Holdback or Holdback terms.
For example;
A merchant operating under Commission-based & Holdback terms: 2% commission, 20-day holdback
A merchant operating under Holdback terms: may work with a 45-day holdback.
When transactions are carried out by this type of merchant, the transactions are held in the merchant's hold account for the agreed number of holdback days. At the end of the agreed holdback period, the relevant amounts are transferred to the merchant's current account.
The early hold release rate is maintained by the bank in 2 different ways: Standard Commission and Special Commission. Banks generally carry out the early hold release transaction at the standard commission rate.
If the merchant has an urgent need for cash;
- The merchant submits an early hold release request to the bank.
- The bank evaluates the early hold release request.
- If the early hold release request is approved, the early hold release commission rate is determined and shared with the customer.
- Once the customer approves the early hold release commission rate, the early hold release request is processed at the agreed commission rate.
- Once the early hold release process is complete, the calculated commissions are deducted and the remaining amount is transferred to the customer's current account.
So, can an early hold release be cancelled?
An early hold release can be cancelled on the same day it was processed. It cannot be cancelled after the day on which it was processed.
Some banks provide the infrastructure needed to carry out early hold release transactions through their digital channels, allowing merchants to complete early hold release transactions without visiting a branch. Naturally, banks approve the transaction only after carrying out risk and security checks on the merchant before the early hold release takes place.