Counter Parties

When your End-Customers or your organization transact with entities outside of the Fuze platform—by sending or receiving funds—these external entities are termed Counterparties. A Counterparty is an individual or business holding accounts or wallets external to Fuze's infrastructure.

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Managing External Financial Interactions

Registering Counterparties helps manage external financial interactions by maintaining a directory of known entities. This supports efficient inbound and outbound transactions, compliance, and reconciliation.

Counterparties represent the identified external party and account for transactions crossing the Fuze platform boundary.

Why Register Counterparties?

Registering Counterparty records within Fuze provides these benefits for inbound and outbound fund flows:

• Compliance: Regulations often require due diligence on transaction participants. This includes identifying payout recipients and sources of incoming funds for AML (Anti-Money Laundering) and CTF (Counter-Terrorist Financing) purposes.
• Efficiency: For recurring transactions, pre-registered Counterparty details save time and reduce manual entry errors.
• Record-Keeping & Reconciliation: Attributing deposits to a known Counterparty or linking payouts to a beneficiary simplifies financial tracking and reconciliation.
• Address Book: Creates a directory of external financial contacts for your End-Customers or organization.

Types of Counterparties

Fuze distinguishes between two primary types of Counterparties based on their relationship to your End-Customer:

1. Self (Customer's Own External Account)

• Definition: A SELF counterparty refers to an external financial account or crypto wallet that belongs directly to your End-Customer.
• Use Cases:
  • Withdrawals: When an End-Customer wishes to withdraw funds from their Fuze-facilitated internal wallet/account to their own personal bank account or an external crypto wallet they control.
  • Deposits: When an End-Customer is depositing funds from their own verified external bank account or crypto wallet into their Fuze-facilitated internal wallet/account.

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  Simplified Personal Transactions

  Registering their external accounts as SELF counterparties allows End-Customers to manage these for deposits and withdrawals. Though linked to the End-Customer's main KYC profile on Fuze, external account verification (e.g., bank account ownership, crypto address validation) may still be necessary.

2. Third-Party

• Definition: A THIRD_PARTY counterparty is any individual or business external to Fuze that is not your End-Customer.
• Use Cases:
  • Payouts: When an End-Customer (or your organization) needs to send funds to someone else—a supplier, a friend, an employee, another business, etc.
  • Pay-Ins: When an End-Customer (or your organization) receives payments from a known external third-party payer into their Fuze-facilitated internal wallet/account.

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  Due Diligence on Third Parties

  For THIRD_PARTY counterparties, collecting identifying information (referred to as kycData in some API contexts) is important for compliance when sending or receiving funds. The required information level can vary by transaction risk and regulations.

Information and Verification

Registering a Counterparty involves providing identifying information. This allows Fuze and your organization to perform due diligence on the external entity. Information may include:

• For individuals: Name, address, contact details.
• For businesses: Legal name, registration details, address.

Linking to External Financial Accounts/Wallets (Destinations or Sources)

A Counterparty record itself primarily holds identity and relationship information. To trace or direct funds, this Counterparty entity must be linked to one or more specific:

• External Crypto Wallets: For sending or identifying sources of cryptocurrency. This involves specifying the blockchain, address, and any required memos or tags.
• External Fiat Accounts: For sending or identifying sources of traditional currency. This involves bank account numbers, routing codes (like SWIFT/IBAN), beneficiary/payer names, and bank details.

This separation of identity from account details is a standard practice. Some external bank accounts may require verification before use.

Typical Workflows

Managing Counterparties can be done proactively or reactively, especially concerning incoming funds:

1. Proactive Registration (Common for Payouts, Optional for Pay-Ins):
   • Register a new Counterparty (SELF or THIRD_PARTY) with identity information via the API.
   • Link specific external crypto wallet addresses or fiat bank account details to this Counterparty.
   • Verify the external destination/source if required (e.g., bank account micro-deposits).
   • For payouts, select the Counterparty's linked destination when initiating the transfer.
   • For pay-ins, if funds are expected from this registered Counterparty, their details can help in automatically reconciling the transaction upon arrival.
2. Reactive Association (Often for Unsolicited Pay-Ins):
   • An incoming fund (deposit) is detected in a Fuze internal wallet/account from an external source.
   • Initially, the source might be identified only by a bank account number or crypto address.
   • Your system or operational team can then:
     • Search for an existing Counterparty matching the incoming transaction's source details.
     • If no match, create a new Counterparty record for this sender (if their identity can be ascertained).
   • The incoming transaction is then associated or linked with the relevant Counterparty record. This enriches the transaction data, aids in compliance (identifying source of funds), and improves record-keeping.

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Flexible Association

Fuze allows Counterparty information to be associated with transactions before they occur or after detection, supporting different operational models.

API Interaction

Fuze's API provides endpoints to:

• Create and manage Counterparty entities (both SELF and THIRD_PARTY), including their identifying information.
• Add, manage, and sometimes verify external crypto wallet addresses and fiat bank account details linked to these Counterparties.
• List and retrieve Counterparty and external account/wallet details.
• Associate transactions with Counterparty records for attribution.

Managing Counterparties for inbound and outbound flows helps create a structured and compliant framework for external transactions processed via the Fuze platform.