What happens if an end-customers account goes into a negative balance, and how does Synctera handle such situations?

When an account goes into a negative balance this can be due to few typical use cases.

1. When the settlement amount of a transaction is greater than the authorized amount e.g. force post or due to a late return

2. Timing issue when the effective date of a transaction is greater than the posted date of the transaction

3. Stand in Processing - allows for the completion of certain transactions when authorization from the service provider is unavailable

4. Fraud - such as when a customer pulls funds, spends the pulled funds, initiates a return with their external bank resulting in a negative balance

For Scenario 1, Synctera will monitor account balances on a daily basis. On the day the negative balance is realized, Synctera will debit your Operational account and hold this money in an Allocated Reserve Suspense Account. We will hold this in suspense to allow you to do one of the following:

• Work with the end customer to recover the funds
• Determine if the account should be closed or frozen
• You can choose to cover the cost

If the funds are recovered from the end customer, you should notify Synctera and once the funds are received, Synctera will reverse the entry from the Reserve Suspense account back to the Operational Account.

If the funds are unable to be recovered after 7 days* and/or the account is closed or frozen, the Synctera team will then write this off as a loss against the Operational account.

You should monitor your Operational account balance and ensure that it is funded in line with your contractual terms on a daily basis. If the Operational account remains in deficit for 7 days, Synctera will instruct an ACH pull from your Operational account with the Bank. However if the Operational balance falls below 75% it must be topped up within 24 hours.

*exceptions to timeframe may apply