What Is an FBO Account?

An FBO account helps businesses securely hold and manage funds for their clients or users, ensuring clear separation of money and regulatory compliance.

An FBO (For Benefit Of) account is a bank account held by one party but intended to benefit another. Typically, a business or payment processor holds the account, while the funds belong to clients, customers, or third parties. This setup is common in fintech, marketplaces, and embedded finance where funds must be kept separate from the company’s operating accounts.

Why Are FBO Accounts Important?

FBO accounts provide legal and operational clarity. By segregating client funds, businesses comply with regulatory requirements designed to protect customers’ money from misuse or bankruptcy risk. This transparency helps build trust with users, partners, and regulators.

Additionally, FBO accounts simplify fund flow management for complex payment ecosystems, such as marketplaces that collect payments from buyers and disburse them to multiple sellers.

How FBO Accounts Work

FBO (For Benefit Of) accounts are typically set up by a financial institution on behalf of a business that needs to manage funds for its users, such as a lending platform, marketplace, or digital wallet provider. The business does not hold the funds directly. Instead, the bank or licensed payment provider maintains the legal ownership, while the business retains operational control over how funds are moved within the account structure.

Funds are often divided into sub-accounts to represent individual users or transactions, allowing businesses to keep track of balances, reconcile payments, and ensure proper allocation. To do this effectively, businesses typically rely on technology partners to handle the movement of money, maintain compliance, and provide visibility into every transaction.

This is where infrastructure like VoPay's plays a central role. VoPay enables money movement across FBO accounts, supports automated workflows for deposits and payouts, and allows for precise account mapping without requiring manual reconciliation. Businesses can also implement safeguards like identity verification and compliance monitoring as part of the process.

By embedding these capabilities into their platform, companies can offer a secure and transparent financial experience to end users, without needing to become a bank themselves.