> Source: [/docs/resources/guides/fbo-accounts](https://tempo.xyz/developers/docs/resources/guides/fbo-accounts.md)
> Section: [Get Started](https://tempo.xyz/developers/get-started.md). Choose a starting point, send a test payment, get testnet funds, connect a coding agent, find the SDKs and CLI, and use the resource guides to plan payment workflows, liquidity, provider selection, and partner integrations.
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[Guides](https://tempo.xyz/developers/docs/resources/guides) / [Liquidity and issuance](https://tempo.xyz/developers/docs/resources/guides#liquidity-and-issuance) / FBO accounts in payment operations
# FBO accounts in payment operations
FBO means for benefit of. In payment operations, an FBO account commonly describes a bank account held by an intermediary for the benefit of its customers or other owners of the funds. The account may hold one owner's funds or pool funds for several owners.
The account agreement and ownership records determine who owns the money, what protections apply, and when customers can access funds.
## The bank balance and the customer ledger
Consider a platform collecting payments for several merchants. A bank account holds the funds, while the platform's ledger records the amount attributable to each merchant. Pending settlements, fees, reserves, and payout instructions can make that ledger more detailed than a simple list of balances.
| Record | Question it helps answer |
| ------------------------------ | ---------------------------------------------------------------- |
| Bank statement | How much is held at the bank? |
| Beneficial-owner records | Whose funds are represented by that balance? |
| Payment and payout ledger | Which movements are pending, complete, or under investigation? |
| Account and service agreements | Who can give instructions, and what happens during a disruption? |
Check how these records reconcile and who can produce them if the intermediary becomes unavailable. The [payment reconciliation guide](https://tempo.xyz/developers/docs/resources/guides/payment-reconciliation) describes connecting payments to internal records.
## Deposit insurance depends on the arrangement
For U.S. accounts, the [FDIC's pass-through insurance guidance](https://www.fdic.gov/financial-institution-employees-guide-deposit-insurance/pass-through-deposit-insurance-coverage) explains the conditions for recognizing the actual owners of funds held through a third party. These include actual ownership, disclosure of the agency relationship in bank records, and records identifying owners and their interests.
Pass-through coverage is not a separate insurance category. Eligible funds are aggregated with the same owner's other deposits in the same ownership category at the same bank. An FBO account doesn't get its own insurance limit. The FDIC determines whether the pass-through requirements are met when the insured bank fails.
The FDIC also explains that a [nonbank payment app is not itself FDIC-insured](https://www.fdic.gov/consumer-resource-center/2024-06/banking-third-party-apps). Deposit insurance covers an insured bank's failure. It doesn't cover the nonbank intermediary's failure or guarantee access to funds while the bank remains open.
## What to confirm before using an FBO arrangement
For a proposed payment flow, document the bank and intermediary, the legal owner of the funds, how customer interests are recorded, and the path for resolving a mismatch. Determine when funds reach the bank, when payouts become available, and which party reports completion.
For example, the platform ledger can mark a payout complete while the bank reports it rejected. The operating process needs to identify the mismatch, restore the correct available balance, and avoid paying the recipient twice.
Licensing depends on the parties' activities and jurisdictions. Opening an FBO account doesn't authorize a payment service.
## How stablecoin balances differ
A stablecoin balance isn't a bank deposit or an FBO account. Moving funds into tokens changes the assets held and adds issuer, custody, and redemption risk. The platform still keeps customer ownership records and a ledger of amounts it owes.
Tempo can carry the onchain leg of a payment flow while a bank account handles collection or payout. The guides to [minting and burning](https://tempo.xyz/developers/docs/guide/issuance/mint-stablecoins) and [stablecoins and tokenized deposits](https://tempo.xyz/learn/stablecoins-and-tokenized-deposits/) cover how the two differ.
## FBO accounts in payment operations FAQ
Is every FBO account a pooled account?
No. An account can hold funds for one owner or multiple owners. The account documents and ownership records determine the arrangement.
Does FBO mean every balance is FDIC-insured?
No. In the United States, coverage depends on the insured bank, ownership category, applicable limits, and pass-through requirements.
Does a stablecoin wallet replace an FBO account?
It can replace or complement a step in a payment flow, but it changes the asset and operating model. You still design fiat access, customer liabilities, ownership records, and reconciliation.