Funding Models

Every Reap project is configured with a funding model at onboarding. The funding model determines where user funds sit, how card spending is backed, and how settlement works.

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The two drivers

Funding in a Reap project is shaped by two choices:

1. Where user funds are held. Either on Reap, in a wallet provisioned for each user, or on your side, wherever you custody user assets today.
2. Whether the project uses Virtual Assets. Virtual Assets are unit balances Reap tracks on behalf of your users. They represent value you hold for them off-platform, or credits you issue to them directly. See Virtual Assets for the full picture.

These combine into a funding model:

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User-Funded

User-Funded is the default funding model. Each user deposits stablecoins into a Reap-provisioned wallet dedicated to them. Their balance stays self-custodied and isolated to that user, and card spending draws from that wallet.

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How funding works

1. You create an account for a verified user. Reap provisions deposit addresses for every supported chain.
2. The user sends supported stablecoins to those addresses. Once the deposit is approved, the balance becomes spendable.
3. The user taps their card. Reap authorizes against the account’s available balance.
4. On a schedule, Reap settles cleared card spend by drawing stablecoins from the user’s wallet.

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When User-Funded fits

• You want Reap to hold user funds end to end, so your users self-custody on the Reap platform.
• You are issuing retail cards where each user funds their own spending directly.
• You do not need to represent externally held assets or issue program credits.

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Program-Funded

Program-Funded is designed for programs where you already hold user funds: custodians, exchanges, crypto wallets, fund managers, brokerage platforms, and corporate treasuries. Instead of users depositing into Reap, you keep a single master collateral account with us, topped up periodically to back card spending across your whole program. Each user’s spending power is represented as Virtual Assets you allocate to their account.

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How funding works

1. You fund the master collateral account. You send stablecoins to the master account’s deposit addresses. This is the only account in your project that holds real crypto, and it backs every card transaction across the program. See Funding via Deposits.
2. You allocate Virtual Assets to users. For each user, you post a DEPOSIT reflecting what they can spend. This is their available balance in Reap. See Postings.
3. Users spend on their cards. Reap authorizes and clears transactions exactly as it does for User-Funded projects. Authorizations check both the user’s available balance and that the master account still covers total outstanding spend across the program.
4. You record settlement on your books. Once card spend clears, post a SETTLEMENT to Reap. This debits the user’s virtual balance and clears their card debt in one atomic step. Settlement can run on whatever cadence fits your operations — per transaction, daily, monthly, or on demand. See Postings.

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What Reap handles for you

Program-Funded preserves your custody model while handing off every part of running a card program. You get:

• Real-time authorization for every card swipe.
• Clearing, reversals, refunds, and fee accounting.
• Fraud monitoring, KYC, and transaction screening.
• Multi-chain stablecoin custody for the master account.
• Settlement with the card network.
• A unified ledger across fiat and crypto movement.

You decide who can spend what. You hold user funds. You settle on your own cadence. Reap does the rest.

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When Program-Funded fits

• You already custody user funds and want to keep them productive on your side rather than float them with Reap.
• Your users self-custody on your platform (wallet app, exchange account, custodian) and you want to issue cards against those balances without moving funds to Reap.
• You want to offer cards backed by assets you hold externally: stablecoins, non-stable crypto, fiat-backed units, or your own points.
• You want to issue program credits (cashback, sign-up bonuses, credit lines, salary allowances) without building card-processing infrastructure.
• You are a corporate treasury or trust structure pre-funding spending for a defined group of users.

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Combined (coming soon)

Combined merges both models: users can hold balances in Reap-provisioned wallets, and you can also allocate Virtual Assets on top. This supports programs where users self-custody their crypto on Reap and additionally earn cashback, or where you extend a credit line above a user’s own deposit. Combined will be offered as a third funding model at project setup once available.

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Funding model and program mode

Funding model is independent from program mode. Both consumer and corporate programs can use either User-Funded or Program-Funded.

• Program mode determines who gets verified and who owns accounts.
• Funding model determines how those accounts are funded.

A typical consumer retail program uses Consumer + User-Funded. A custodian issuing cards against balances held on their platform uses Consumer + Program-Funded. A corporate expense program with company-held balances uses Corporate + User-Funded or Corporate + Program-Funded depending on whether the company custodies the funds or deposits them with Reap.