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End-Customer Terms

Introduction​

Defining "Terms"​

“Terms” is a general word for 2 types of transactions that your end-customers will see in their accounts:

  • Fees are charges to the end-customer’s account. Example: an end-customer gets charged a $10.00 fee for an outgoing wire payment.
  • Credits are deposits into the end-customer’s account. Example: an end-customer gets an interest payment of $5.60 at the end of the month.

The terms you offer your end-customers are a business decision. For compliance purposes, Unit will help you ensure that those terms are properly disclosed in your Terms and Conditions.

Offering Different Terms to Different End-Customers​

  • You can create different sets of terms for different sets of end-customers. For example, you may offer low wire fees and a high interest rate for a set of “VIP customers” while offering standard wire fees and standard interest rate to the rest of the customers.
  • You can switch an end-customer between different sets of terms. For example, once an end-customer has reached a balance of $5,000, or a card spend of $10,000, you may choose to upgrade them to “VIP terms”.

Automatic vs. Programmatic Terms​

  • Generally, Unit automatically handles all end-customer terms for you. Examples: the right wire fee is charged when your end-customer initiates a wire, and the right interest payment is made to their account at the end of the month. You will only need to specify the name of a deposit product for their account (e.g. “checking” or “checking-vip”).
  • However, you can always implement custom terms programmatically. For example, if you’re building a tool for small businesses and you want to give a one-time bonus (credit) to any customer who has been active for a full year, you can make an API call to make this deposit into their account when the time comes.

How Terms Flow Between Your End-Customers, You and Unit​

  • The terms you offer end-customers are between your company and them. Fees (e.g. $0.20 for a withdrawal via ACH) are transferred from their accounts to your revenue account.

  • The terms Unit offers you are captured in your Unit term sheet. Remember that:

    • Fees (e.g. $0.10 fee for an ACH transaction) are calculated outside the Unit platform and are included in your monthly invoice at the end of the month.
    • Credits (e.g. interest on your accounts or interchange) are calculated inside the Unit platform and are distributed to your revenue account, your end-customer’s accounts or both (depending what terms you decided to offer your end-customers).

  • That means that you can mark-up or mark-down all terms that Unit offers you. For example, you can charge end-customers no fee for ACH payments, or offer a higher interest than what Unit pays you.

  • You can also offer additional terms that have nothing to do with Unit’s terms to you. Examples: a minimum balance fee or a cash bonus to an end-customer upon sign-up. Both of which don’t exist in the terms Unit offers you.

Fees​

You may set end-customer fees based on the terms between you and Unit:

  • ACH origination
  • ACH receiving
  • ACH return
  • Wire sending
  • Wire receiving
  • Check deposit
  • Check sending
  • Physical card issuing
  • Physical card replacement
  • Virtual card issuing

In the case of those fees, you should consider whether you’d like to pass the fee as-is, apply a mark-up or apply a mark-down.

Fees: How Mark-Up Works​

Example: you pay Unit $0.10 per ACH transaction and you decide to charge your end-customers $0.30 per ACH transaction- a mark-up of $0.20.

Once an end-customer uses ACH to withdraw $100 from their account:

  • An originated ACH transaction of -$100 is created in their account
  • A related fee transaction of -$0.30 is created in their account
  • A fee transaction of $0.30 is created in your revenue account
  • Unit will include a $0.10 charge in your next invoice for this ACH transaction

Fees: How Mark-Down Works​

Example: you pay Unit $0.10 per ACH transaction and you decide to charge your end-customers $0.05 per ACH transaction- a mark-down of $0.05.

Once an end-customer uses ACH to withdraw $100 from their account:

  • An originated ACH transaction of -$100 is created in their account
  • A related fee transaction of -$0.05 is created in their account
  • A fee transaction of $0.05 is created in your revenue account
  • Unit will include a $0.10 charge in your next invoice for this ACH transaction

Other Fees​

You may set other end-customer fees that are not based on the terms between you and Unit:

  • Subscription
  • Per-transaction
  • ATM: end-customers are always charged the fee set by the ATM operator (see ATMs guide). You can decide to charge them on top of that.
  • International card transactions: end-customers are always charged the network fee (see FAQ). You can decide to charge them on top of that.

Credits​

You may set end-customer credits based on the terms between you and Unit:

  • Cash-back (also known as interchange between you and Unit)
  • Interest (interest between you and Unit can be distributed to your end customers based on the terms and conditions you offer them)

In the case of those fees, you should consider whether you’d like to pass the credit as-is, apply a mark-up or apply a mark-down.

Other Credits​

Other end-customer credits you may offer have nothing to do with Unit:

  • Sign-up bonus
  • Ad-hoc bonus
  • ATM fee reimbursement

Closing Accounts​

Accounts can be closed for one of 3 main reasons:

  • Customer requested to close the account
  • Customer committed fraud
  • Customer violated the terms and conditions
  • Bank requested to close the account

When an account that has a negative balance is closed, the balance will be considered a loss, and will be covered from your reserve account.

When an account is in a negative balance for a long period of time (typically between 30-60 days, depending on the use case and disclosed on the account holder agreement), the account will be automatically closed and the balance will be covered by transferring funds from your reserve account. When that happens, the customer will be immediately archived.

Archiving Customers​

Customers cannot be deleted from the Unit platform, as their details have to be stored for regulatory reasons. Instead, Customers that are no longer active on the platform are archived.

Archiving a Customer is a final action that cannot be undone. In the future, if you would like to provide financial services to the same customer, they would have to submit a new Application.

  • Once a Customer has been archived, they become read-only and no changes can be made to anything associated with that customer.
  • You may only archive a customer after all their account have been closed.

You may proactively archive a customer through the API or dashboard. It is recommended to archive all customers that had their accounts closed for fraud reasons, or for violating the terms and conditions.

Auto-archiving Customers​

A nightly auto archive process archives customers if all their accounts have been closed without a balance for a long period of time (typically between 30-60 days, depending on the use case).

The auto archive process serves a compliance need - if a customer does not have an open account on the platform for a period of time, it is required by regulation that they go through a new KYC/KYB evaluation before they are allowed to open an account. In addition, asking the end customer to go though a re-evaluation reduces the risk of a dormant customer's log-in details being obtained by a bad actor, using them to commit fraud.