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Because the payment card industry and the banks that make up the PCI, aren't going to eat losses due to fraud, chargebacks, and refunds. So you must hold a reserve to cover them, and it's either your money, or the merchants' money.

If you're holding the reserve from your own pockets, you're very trusting, to the point of being naive.

Additionally, the longer you hold the money, before sweeping it to the merchant, the more interest you earn on it.

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Completely agree with your reasoning. However, there's a difference with how Balanced operates. The marketplace understands the credibility/reputation of the seller in a way that a merchant processor never could.

Balanced gives the marketplace the ability to control when the seller receives their money. The most important factor is trust and some form of buyer confirmation that fulfillment has happened to their satisfaction. It's the job of Balanced to push the money to the seller as fast as possible.

Yes. But if Balanced is not forcing a reserve on the marketplace owner, then either balance is accepting a huge amount of risk in the transactions, or the marketplace owner is (and might not be totally aware of that risk until she gets bitten by a charge back).

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