On-demand Funding

On-demand funding is a card product feature that allows financial accounts to maintain a $0 balance until authorization and receive real-time funding as needed. On-demand funding uses a source financial account for funding account holder financial accounts. When an account holder initiates a transaction, Highnote moves funds from the source financial account into the account holder's financial account to cover the cost of the transaction.

Note: You can enable and test on-demand Funding features in your test environment for prepaid and debit card products. In the live environment, the Highnote team must enable the feature for your card product.

When enabling the feature, you can optionally choose to enable pseudo balance. Pseudo balance lets you set a spend balance on an account holder's financial account. This ensures the account holder cannot spend over a specific balance amount.

A pseudo AVAILABLE_CASH ledger is used to keep track of the spend balance. Highnote checks the ledger when a transaction is initiated and automatically declines transactions over the allocated balance. Highnote also checks the balance of your source financial account during authorization.

For example, you choose to allocate $100 of pseudo balance to a financial account. The account holder spends $100 on their payment card. The initial $100 transaction would be approved, but any additional authorizations would be denied since the account holder spent the full balance.

If pseudo balance isn’t enabled, Highnote checks the balance of your source financial account during authorization.

Use the following mutation to enable on-demand funding and use a boolean value to optionally enable pseudo balance in your test environment:

Before issuing a financial account with an on-demand funding source, you must have a source financial. A source financial account is a pre-funded account that links to the account holder's financial account for funding.

The following accounts can be used as source financial accounts:

• A financial account issued against an application
• A product funding account
• A financial account that exists at the account holder level

Source financial accounts can be existing accounts or new accounts. To issue a new financial account as your source financial account, use the following mutation:

When an account holder’s application is approved, you can issue the account holder a financial account with an on-demand funding source.

Use the following mutation to issue a financial account with an on-demand funding source:

Note: You must have pseudo balance enabled for your card product to use the following mutation.

You can set and update the pseudo balance on an account holder's financial account. After setting and updating a pseudo balance, you should query the balance update to ensure correct ledger balances and validations.

The following table contains example scenarios in chronological order for setting and updating a pseudo balance:

Use the following mutation to initiate a financial account pseudo balance update:

After updating the pseudo balance, you can check the status of the update using two methods:

• Query Highnote's API to retrieve the status
• Subscribe to the INTERNAL_TRANSFER_BETWEEN_FINANCIAL_ACCOUNTS notification event

Pseudo balance updates have the following statuses:

Use the following query to check the status of a pseudo balance update:

Once a financial account is issued, you can look up the source financial account using the following query: