Having a minimum refund balance means that you will always have a balance to use in case you need to issue refunds to your customers. This is an optional setting.
However, we advise that you always keep a minimum refund balance in your account. You can learn more about how to issue refunds here.
If you choose to have this setting enabled, we will keep an amount of your choice from your current balance and it will always be available in your account to issue refunds when, for example, your merchant account balance has been paid out and you need to refund a customer but you don't have any new payments yet.