5.	CASH DUE FROM GATEWAYS

Cash due from gateways consisted of the following:

	December 31, 2019			December 31, 2018

Cash due from Gateways	$	3,073,183		$	291,112
Amount due from gateways and merchants – hold and fees		4,824,223			-
Reserves (2)		5,353,661			474,224

Total cash due from gateways		13,251,067			765,336
Chargeback Allowances (1)		-			(134,637	)
Allowance of uncollectable – hold and fees		(4,824,223	)		-

Total cash due from gateways, net	$	8,426,844		$	630,699

(1) During 2018, the Company absorbed all chargeback costs as a cost of services provided – essentially a sales promotion tool to onboard customers in 2018. The Chargeback Allowance shown in the table above reflects our estimate of potential chargebacks that are likely to be realized in 2019, which are connected to sales transactions that occurred in 2018. The allowance decreases the amount that GreenBox is owed from the Gateways we use in our proprietary ecosystem. In 2019, the actual dollar amount of chargebacks will be reconciled with our allowance.

(2) Reserves are essentially an escrow fund that protects a gateway/card issuer from financial losses. In the Reserve, funds are held until chargeback time limits expire.