Introducing Wallets, a simple way for customers to store and spend money
Wallets are a great fit for use cases that don't require a traditional bank account—things like business bill payments, stored-value wallets, and benefits.
Introducing Wallets
Today, we’re excited to announce Wallets, or FBO accounts, a simple way for your customers to move and store money for use cases that do not require a traditional bank account.
They’re a new type of account on the Unit platform, alongside Deposit Accounts and Credit Accounts. Each of these account types can carry a balance (example: $50) and support transactions (example: two ACH credits of +$25 each).
Many people are familiar with wallets from apps like Uber. When an end-customer loads $50 onto their Uber Cash account, those funds are stored in a wallet rather than a traditional bank account.
Why choose FBO accounts over traditional deposit accounts?
- Depending on the use case, they can be faster and easier to set up, with streamlined onboarding flows (subject to bank approval).
- They can be a good fit for customers who don’t need the full suite of services that come with a traditional bank account.
- They can be a good fit for use cases that limit how and where the money can be spent (e.g., closed-loop payments, FSA accounts).
Similar to an embedded deposit account, Wallets also allow companies to improve customer retention and engagement by keeping funds on the platform.
Similarities between deposit accounts and wallet accounts:
- They are both types of accounts
- Created under a customer
- Have a balance and transactions under them
- Have an individual routing number and account number
- Can send and receive payments
- Can contain cards that use their balances
- Can have terms and limits you define
- FDIC insured or eligible for pass-through FDIC insurance
Differences between deposit accounts and wallet accounts:
- Legal relationships: Legally, deposit accounts are opened when a customer signs a standard deposit agreement with the bank. Wallet accounts have a different legal design, when a customer signs directly with your company.
- Constraints: Deposit accounts must offer full control over funds to the customer. Wallet accounts could be designed to have restrictions, as long as they are compliant and clearly disclosed (for example, wallets that support closed loop payments only).
- Customer identification: Deposit accounts require a set of identifying information on the customers they are created under, as required by law. Wallet accounts may offer flexibility in the data points collected, depending on the use case.
- Interest: Deposit accounts can offer interest to the customer. Wallet accounts legally can’t pay interest to the customer, but are eligible for deposit fees (the mathematical equivalent of interest) that is paid automatically into your revenue account.
- FDIC insurance : Deposit accounts can offer much higher FDIC insurance than the standard $250,000. Wallet accounts only offer $250,000 in FDIC insurance, through “FDIC pass-through insurance”
Use cases for Wallets
Wallet accounts can be a great fit for the following use cases:
- Business bill payments. Certain kinds of bill-pay solutions can be enabled using Wallets. For example, BILL could use Wallets to help their small-business customers pay vendors. Imagine a customer, ABC Kitchen, who needed to pay two grocery suppliers. They could send $2,000 into their BILL wallet and, from there, make two subsequent payments of $1,000 to the grocers.
- Stored-value consumer wallets. Marketplaces or platforms can enable end-customers to store funds that can only be spent with businesses on their platform. Uber Cash is a great real-world example. End-customers can add funds to Uber Cash and use them towards purchases on Uber, like rides, packages, and food deliveries.
- Benefits. Employee-benefits platforms can enable their customers to offer benefits like Flexible Savings Accounts (FSAs) via wallets. This enables employers to set up and offer certain benefits programs without needing to open an additional bank account. For example, Rippling enables small businesses to offer FSA wallets to their employees, who can use them to pay for eligible medical expenses.
Get started
Currently, Wallets only support business use cases. If you’re interested in offering Wallets to your customers, please contact us or reach out to your Customer Success Manager.
To learn how to implement Wallets, check out our docs.
