Guarantee Deposit

A guarantee deposit, in the context of payments and financial transactions, is a sum of money held by a service provider or financial institution as a security measure. It acts as a form of collateral to cover potential risks and financial obligations that may arise during the course of business. The deposit is typically collected from merchants  and is held in reserve to mitigate the impact of chargebacks, refunds, or other liabilities. The guarantee deposit helps ensure that the service provider has funds available to address any financial issues that may occur, providing a level of assurance and financial security in the payment processing ecosystem.