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Introduction

Wallets are a way for banks to send and/or store money on behalf of third parties in certain instances. They can offer simplicity and ease of use for programs that involve lower balances and limited payment options. They can offer an on-ramp to more standard deposit accounts, offering companies a way to pilot, or offer narrowly-defined financial features to their customer bases to enhance loyalty and trust. remove the extra blank line

Definitions​

For the purpose of this guide, the following definitions apply:

  • Bank: Bank means a depository institution that provides one or more financial products to Clients and End Users via the Unit platform.
  • Client (or "you"): Client means the customer that works directly with the Bank to make available to End Users via the Unit platform financial products provided by the Bank.
  • End User: End User means the ultimate End User that uses a financial product provided by the Bank via the Unit platform.
  • Unit: Unit is a service provider to Banks, and the Clients that Banks work with directly, to enable Banks to offer their banking services online.

How Wallets Work?​

To offer Wallets, the bank will establish a form of custodial (fiduciary) account called a “For the Benefit of” or “FBO” account where the bank opens an account in the bank’s name under the bank’s EIN, and holds, moves, and manages Client, Customer, and/or End Customer funds. The funds in the FBO accounts are tracked via the Wallets, which are sub-ledger entries. This allows the bank to facilitate each respective program and ensure proper records and reconciliation of all the financial activity happening in the FBO Account. Since the FBO account is owned and controlled by the Bank, Wallets are able to support financial activities that require certain licenses that the Bank owns but you don’t.

Use Cases​

Wallets are a good fit for multiple use cases:

  • Prepaid access and cards: As an example, employee-benefits platforms often choose to offer Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) via Wallets. This enables employers to contribute funds, and end-customers to spend or receive reimbursement for certain benefits-related purposes.
  • Accounts payable/accounts receivable: If a platform helps its business customers manage expenses, such as paying bills (accounts payable) and receiving payments from their customers (accounts receivable), Wallets can enable the bank to facilitate such payments.
  • Simple payments: You can use Wallets to pilot new financial features, build customer loyalty, and even serve as an on-ramp to standard deposit accounts. Because the funds are held, managed, and moved by the bank on behalf of your customers, you won’t need to acquire a money-transmitter license.

Main Components​

  • FBO Account: The Bank opens an FBO Account. Wallets are sub-ledgers within the FBO account and are used to track funds transfers in and out of the FBO Account for each respective End Customer.
  • Wallet: Each Wallet is configured to allow for specific functionalities in accordance with the applicable program and approved use of the Wallet. The configurations are added to the “Wallet Term” (discussed below).
  • Wallet Terms: Wallet Terms configurations are required for each Wallet. The Wallet Terms define the set of features and functionalities that are applicable to the Wallet, for example any:
    • Fees
    • Limits
    • Card settings
    • Clearing periods for various payments (e.g. check deposit)
info

Wallet Terms configurations can only be created and updated by Unit's Compliance Team, and are subject to Bank approval.

Supported Functionalities​

These are the only functionalities that a Wallet can support:

  • Originate ACH (both credit and debit)
  • Receive ACH (both credit and debit)
  • Book Payments: These are the type of supported money movements that involve Wallets:
    • Moving funds between two Wallets under your organization.
    • Moving funds from Wallet to a Deposit Account under your organization.
      note

      Moving funds from a Deposit Account to a Wallet under your organization is not supported.

  • Issue and use debit cards
  • Prepaid access

Commercial Terms & Prerequisites​

note

Wallets are currently supported only for Business use cases.

If not already included, Wallets will be added to your Unit Terms Sheet for your implementation. Contact your Success Manager for more details.

Tech Integration​

note

Contact Unit to ensure that all the Wallet configurations on Unit's side are completed.

Depending on the program, the Wallet configuration process may differ.

Implementation options​

Option 1​

  1. Wallet configuration was completed:
    • FBO account is created.
    • Wallet Terms is created.
  2. Create Business Application
  3. Create Wallet
    • When calling the endpoint, you will need to include an id of the BusinessCustomer that was created successfully as a result of Create Business Application call. An attempt to create a Wallet using a businessWalletCustomer that was not created as a result of an approved application will fail.
    • You will need to include a walletTerms name when calling the endpoint.
    • In sandbox, use walletDefault as the value in the walletTerm field that the endpoint expects to receive.
  4. The Wallet’s supported functionalities will be in accordance with the configuration of the Wallet Terms so if for example the ability to deposit checks was not enabled in the Wallet Term, any check deposit attempt will fail.
info

If a certain Wallet functionality is not supported as expected, Contact Unit in order to troubleshoot and resolve the issue.

Option 2​

  1. Wallet configuration was completed:
    • FBO account is created.
    • Wallet Terms is created.
  2. Create Business Wallet Customer
  3. Create Wallet
    • When calling the endpoint, you will need to include an id of the BusinessWalletCustomer that was created successfully as a result of Create Business Wallet Customer call. An attempt to create a Wallet using a businessCustomer that was not created as a result of an approved application will succeed.
    • You will need to include a walletTerms name when calling the endpoint.
    • In sandbox, use walletDefault as the value in the walletTerms field that the endpoint expects to receive.
  4. The Wallet’s supported functionalities will be in accordance with the configuration of the Wallet Terms so if for example the ability to deposit checks was not enabled in the Wallet Terms, any check deposit attempt will fail.
info

If a certain Wallet functionality is not supported as expected, Contact Unit in order to troubleshoot and resolve the issue.