Secured charge accounts

Creating a security

A CHARGE_SECURED account first requires the existence of a security. This acts as a funding source for securing any credit transaction to be applied against the secured charge account: any change to the security’s available funds will also change the CHARGE_SECURED account’s ability to spend.

Using a customer DDA as a linked security account

For details on creating a CHECKING or SAVING account, refer to our guide here.

This approach enables a Synctera Smart card product offering. Using a customer’s CHECKING account to serve as the linked deposit account allows the customer to adjust their CHARGE_SECURED account’s spending ability, while still enabling them to move money out of their DDA if desired. Although the linked deposit account in this case is simply a DDA, it must have certain characteristics for the linking to be successful:

Field	Value
`account_type`	Must be `CHECKING` or `SAVING`.
`relationships`	The account holder for this account must be the intended account holder of the secured charge account.
`balance_ceiling`	Must be `null`.
`balance_floor`	Must be `null`.
`interest_product_id`	This links to an interest product, to configure an interest rate on the deposit account. Refer to our interest guide for more details.
`is_ach_enabled`	Must be `true`.
`is_p2p_enabled`	Must be `true`.

It is not currently possible for a linked deposit account to secure more than one charge account.

Creating a secured charge account

You may refer to our V2 guide on accounts here.

A secured charge account is a credit account which infers its spending ability from its linked security. Once the security account is available for linking, a CHARGE_SECURED account can be created.

Creating a `CHARGE_SECURED` account template

Our system will mostly fill in default values for CHARGE_SECURED account templates, but a few specific attributes must be set for this account type:

Field	Value
`template.account_type`	Must be `CHARGE_SECURED`.
`template.minimum_payment`	Must be set. Currently, only type `FULL` is supported.

The following is a sample valid request:

curl -X POST \
    -H 'Authorization: Bearer $apikey' \
    -H 'Content-Type: application/json' \
    -d '
    {
        "name": "Charge-Secured-Template",
        "description": "For creating charge secured accounts",
        "is_enabled": true,
        "template": {
            "account_type": "CHARGE_SECURED",
            "currency": "USD",
            "bank_country": "US",
            "minimum_payment": {
                "type": "FULL"
            }
        }
    }' $baseurl/v0/accounts/templates

Creating a `CHARGE_SECURED` account

The account template will populate most of the required values for a new charge account, but you will need to provide details about the security:

Field	Value
`account_template_id`	Set to the ID of the account template created in the last step.
`relationships`	See guide here. If linking to a deposit account, the account holder must currently be the same customer as the linked account.
`security`.`linked_account_id`	If using a linked deposit account as the security, this field is required.
`application_id`	The linked application for a charge secured account. This field is not required, but if provided, the application must be approved.

It is not currently possible to change the security of a secured charge account.

The following is a sample valid request:

curl -X POST \
    -H 'Authorization: Bearer $apikey' \
    -H 'Content-Type: application/json' \
    -d '
    {
        "account_template_id": "23ce6444-2648-4399-832c-adc1ac0a8e4d",
		"relationships": [{
            "relationship_type": "ACCOUNT_HOLDER",
            "customer_id": "4abc9499-0184-43ca-9a14-e9648152f9da"
		}],
		"security": {
			"linked_account_id": "c1a58202-0cae-436d-9984-e1b951b95c87"
		}
    }' $baseurl/v0/accounts

Balance management

All examples in this section are expressed in US dollars.

This section serves as an overview of what to expect when transacting against an account of this type.

Loading funds into the security account

If the security and secured charge accounts are both new, then they will have no available funds.

Account	Available (cents)	Balance (cents)
Security	`0`	`0`
Secured Charge	`0`	`0`

The first step for enabling transactions at this point would be to fund the security account. Let’s simulate a $100 credit:

Account	Available (cents)	Balance (cents)
Security	`10000`	`10000`
Secured Charge	`10000`	`0`

As the available balance goes up on the security account, the secured charge account responds in kind by increasing its available credit.

Transacting against the secured charge account

Now, let’s simulate what happens if we spend some of that newly available credit. Initiating a pending transaction of $20 against the secured charge account:

Account	Available (cents)	Balance (cents)
Security	`8000`	`10000`
Secured Charge	`8000`	`0`

As you can see, the pending transaction reduces the available credit of the secured charge account, but it also reduces the available balance on the security account. If the transaction settles:

Account	Available (cents)	Balance (cents)
Security	`8000`	`10000`
Secured Charge	`8000`	`2000`

We can see that the balance of the secured charge account changed to reflect the posted transaction.

Secured Charge accounts are credit accounts

This means that the balance will express what has been spent against the account. This is in contrast to a DDA, such as a CHECKING or SAVING account, which is a debit account that expresses funds deposited in the account.It’s important to keep this distinction in mind when displaying these account balances to your customers.

Transacting against the security account

If the security account is a customer DDA, then we can also transact against the security. This concept is crucial for Synctera Smart card product offerings, as the user keeps the ability to move their security funds if they so choose. Continuing with our scenario, let’s immediately transfer $50 out of the security account:

Account	Available (cents)	Balance (cents)
Security	`3000`	`5000`
Secured Charge	`3000`	`2000`

After this action is complete, we can see the following effects:

The security account’s balance was adjusted from $100 to $50 as expected.
As a result, the security account’s available balance was also adjusted by $50, to reflect the transferred funds.
The secured charge account responds to this change in available funds by reducing its available credit to match.
The secured charge account’s balance does not change, as it was not the subject of the transaction.

Note that the available balance of the security account continues to be critical to this equation — although the security continues to hold $50 in funds, it only has $30 available. This means that if we were to run this scenario again, we would see an error due to a balance violation. The $20 unavailable in the security is subject to a hold, as a result of the transaction applied against the secured charge account. Until the $20 balance on the charge account is repaid, the $20 hold on the security remains.

Repaying the secured charge account

Let’s simulate a partial repayment against our example secured charge account for $10:

Account	Available (cents)	Balance (cents)
Security	`4000`	`5000`
Secured Charge	`4000`	`1000`

We can see now that the balance on the secured charge account has gone down, but this also freed up the security account’s available balance by the same amount.

Repayment of the secured charge account

The account holder may need to authorize the auto-repayment logic described below. Please discuss with your compliance officer and ensure proper disclosure is included in the account agreement.

Once a statement is issued for a CHARGE_SECURED account, the account holder will be given a due date for full repayment of the statement balance. If account holder opts-in to the autopay feature after acknowledging the proper autopay disclosure, Synctera system will automatically repay any outstanding statement balance using funds held in the security account when a statement is generated. If we take our example scenario, we left an outstanding balance of $10 on the secured charge account. Assuming that the balance does not change by the time a statement is issued, and the account holder has opted in for autopay, once the statement is generated, the following scenario will occur:

Account	Available (cents)	Balance (cents)
Security	`4000`	`4000`
Secured Charge	`4000`	`0`

As a result of this auto-repayment of the statement balance, the security account balance was debited, which reduces the total security available for lending, and the secured charge account was credited in turn, which eliminates the need for a hold on the security funds. This functionality ensures that a secured charge account never enters a state of delinquency. Account holder can also opt out from autopay and choose to repay their statement balance on their own using other supported payment methods, e.g. ACH, Wire. If the account holder does not pay in full by the due date listed on the account agreement, the account will not be able to spend anymore. The account holder will still be expected to make payments until the due amount is paid in full.

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Platform Tools

Secured charge accounts

Creating a security

Using a customer DDA as a linked security account

Creating a secured charge account

Creating a `CHARGE_SECURED` account template

Creating a `CHARGE_SECURED` account

Balance management

Loading funds into the security account

Transacting against the secured charge account

Secured Charge accounts are credit accounts

Transacting against the security account

Repaying the secured charge account

Repayment of the secured charge account

​Creating a security

​Using a customer DDA as a linked security account

​Creating a secured charge account

​Creating a CHARGE_SECURED account template

​Creating a CHARGE_SECURED account

​Balance management

​Loading funds into the security account

​Transacting against the secured charge account

​Secured Charge accounts are credit accounts

​Transacting against the security account

​Repaying the secured charge account

​Repayment of the secured charge account

Creating a security

Using a customer DDA as a linked security account

Creating a secured charge account

Creating a `CHARGE_SECURED` account template

Creating a `CHARGE_SECURED` account

Balance management

Loading funds into the security account

Transacting against the secured charge account

Secured Charge accounts are credit accounts

Transacting against the security account

Repaying the secured charge account

Repayment of the secured charge account