Counterparty Overview

Counterparties are any external entities you interact with financially—think of them as vendors, government agencies, billers, or even customers of your bank. In Braid, a counterparty is anyone you send money to or receive money from.

To ensure clear, secure, and structured transactions, counterparties in Braid are linked to three potential levels of your customers’ relationships: Customer, Account, or Product. Understanding these levels helps your bank control how these counterparties interact with your customers, manage transaction visibility, and maintain compliance.

What is a Counterparty in Braid?

A counterparty is an entity involved in a financial transaction, acting as the “other side.” It could be a business, individual, government entity, or service provider that your customer needs to interact with. In Braid, counterparties are more than just payees—they are dynamic elements linked to your bank's customers in various ways to ensure security and regulatory compliance.

Relationship to a Customer

In Braid, Customers can be businesses or individuals that your bank serves. A counterparty’s connection to a customer determines who can access the counterparty and the scope of transactions:

• Private and Controlled Access: Counterparties linked at the customer level are designed for exclusive interactions, ensuring that only designated accounts of a particular business or individual can transact with them.
• Enhanced Compliance: Properly defining counterparties helps banks enforce transaction limits, monitor specific activities, and maintain secure operations.

Three Types of Counterparty Associations

Counterparties can be set up at different levels to define their relationship and interaction with your customers.

Customer Level

• What It Means: The counterparty is tied specifically to a single customer (either a business or individual).

• Purpose: This association is used when a counterparty should be private, visible only to the specific customer.

• How It Works:

  • Business Customers: When linked to a business, only that business’s accounts can access this counterparty. For example, a specialized vendor that serves only one of your bank’s corporate customers.
  • Individual Customers: When linked to an individual, only that individual's accounts can access the counterparty. This setup is useful for personal payments, such as a specific tuition payment vendor for a student customer.

    Example: A small business customer of your bank regularly pays a specific supplier. This supplier is set up as a counterparty at the customer level, making it accessible only to the accounts of that business.

Account Level

• What It Means: The counterparty is linked to a specific account, ensuring transaction exclusivity at the account level.

• Purpose: This association is useful when the counterparty should only transact with one account.

• How It Works:

  • This counterparty is only visible to the account it is linked to, maintaining security and compliance. For example, a specific loan repayment is linked only to the borrower’s repayment account.

    Example: A mortgage payment account is set up with a counterparty that represents the lender, allowing only that account to initiate payments.

Product Level

• What It Means: The counterparty is associated at the product level, making it accessible across all your bank’s customers and accounts.

• Purpose: This level is for counterparties that are relevant to all customers and accounts, such as utility companies, government agencies, or nationwide billers.

• How It Works:

  • Counterparties at this level are set up for broad access, making them available for any account or customer at your bank. This enables streamlined, consistent transactions.

    Example: The IRS is a counterparty at the product level, allowing any customer of your bank to make tax payments seamlessly.

How to Choose the Right Counterparty Level

• Customer Level: Ideal for private relationships where a counterparty serves only one customer. Use this level for personalized vendors or payees.
• Account Level: Best for situations where the counterparty should be linked to a specific account, like a dedicated loan repayment account.
• Product Level: Suitable for common billers, government agencies, or any entity that needs broad access across your bank’s customers.

Counterparty Association Overview