Platform Accounts

Mbanq works on a dedicated FBO model for our platforms. In this model, each platform would have a dedicated account For the Benefit Of (FBO) their end-users at one of our partner banks This is the main account for your Platform. This allows the Platform to manage funds on behalf of - or for the benefit of - one or more end users, without assuming legal ownership of the account. All end user deposits and payment transactions will ultimately be rolled up and ledgered to this account.

When a new Platform is being set with Mbanq, the platform will be required to have, and in some cases fund, the following three main accounts within the FBO account:

Organizational Account

The Organizational Account refers to an account maintained on the CORE for the Platform to track and manage financial transactions for running their programs (Ex: transfer rewards to customers, disburse loans, collect repayments, collect fees, etc). The Platform can use this account to perform any incoming/outgoing transfers if required.

Funds placed in the Organization account are moved to the Loss Provisioning account at regular intervals by Mbanq to cover negative balances.

Loss Provision Account

The Loss Provisioning Account is a zero-balance account used to set aside provisions for potential losses that may arise from customer disputes or other uncertainties.

If a client has raised the dispute and is able to provide all the required documentation, then a provisional credit to the Client user will be credited to their account by debiting the Loss provisioning account.

All the losses that are booked against the Loss Provisioning account are reimbursed by crediting the Loss Provisioning account and debiting the Organizational account at the end of every business day.

Reserve Account

The Reserve account is a special account loaded by the Platform to ensure that the Platform always has enough funds to offset deficits in the FBO. For example if an end user account is overdrawn, funds will be moved to cover the shortfall in the other account.

Any temporary funds that are not cleared are also parked in the reserve account for a platform. This includes potential chargebacks won from networks on issued cards which are posted to the reserve account on a monthly basis.

This account must be pre-funded by the Platform, prior to going live.

Reserve ratio

The Platform is responsible for initially loading the Reserve account with a predetermined amount for example, $10,000. The funds in the Reserve account are then reviewed monthly to maintain a balance satisfying the following criteria:

Minimum Reserve Account Balance = Current overdrafts carried by the Platform + Greater of $10,000 OR (6 x Average Monthly Overdraft generated by the Platform over the last three months)