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What “nesting” means

Nesting is the use of a virtual account to serve customers of the account holder without those customers being onboarded and monitored as EngageXPay customers in their own right. It is a form of hidden financial intermediation, and it is prohibited by EngageXPay’s regulators and banking partners. Nesting is prohibited if you:
  • collect funds from multiple third parties into a virtual account you hold, and then pay those parties out to different recipients on their behalf; or
  • use your virtual account to run any activity typical of a bank, money services business, payment service provider, e-money institution, virtual asset service provider, prepaid provider, or similar business, unless you have disclosed that activity to EngageXPay in advance and received written acceptance.
These commitments are set out in EngageXPay’s Virtual Account No-Nesting Terms, which every developer and every end customer accepts at Virtual Account onboarding.

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How EngageXPay works with developers and their customers

EngageXPay is a B2B infrastructure platform. Developers integrate with EngageXPay’s APIs to offer financial services to their own customers. Here is how the relationship works:
  1. EngageXPay onboards the developer. We perform KYB on the developer’s business, review their AML policies, onboarding criteria, and customer risk assessment framework. Once approved, the developer can use EngageXPay’s APIs. At onboarding, the developer also accepts EngageXPay’s Developer No-Nesting Terms.
  2. Each end customer must be onboarded individually. EngageXPay requires every customer (individual or business) to go through KYC or KYB via EngageXPay’s platform before they can receive a virtual account or transact. There are no exceptions to this. At onboarding, each end customer also accepts EngageXPay’s Customer No-Nesting Terms.
  3. Virtual accounts are issued per onboarded entity. Once a customer passes verification and meets our banking partner’s eligibility criteria, they receive their own virtual account. The developer themselves also receives a virtual account as part of their onboarding, if eligible.
Nested onboarding: the developer passes KYB with EngageXPay, then onboards its individual (KYC) and business (KYB) customers, who each get their own virtual account
EngageXPay does not contact a developer’s end customers directly. All customer communication is handled by the developer.

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Every account holder must be the beneficial owner of funds

Every account holder must be the beneficial owner of the funds in their virtual account. That means the funds must belong to the account holder, even if they are paid in by a named third party such as a customer, supplier, or payment processor. The account holder must also be onboarded with EngageXPay. What EngageXPay does not support is nesting, meaning using a virtual account to receive funds that beneficially belong to someone else who has not been onboarded with EngageXPay. This includes pooling funds from multiple third parties, operating as a money services business, payment service provider, or financial institution through EngageXPay’s infrastructure, or otherwise acting as an intermediary for undisclosed downstream customers.

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What “beneficial ownership” means in practice

The funds in a virtual account must beneficially belong to the account holder. Where they are paid in by a named third party, the account holder must be able to demonstrate a legitimate business relationship with that third party. Example: Agency or drop-shipping business A drop-shipping store onboarded with EngageXPay receives a payment from a supplier or buyer. This is acceptable if:
  • The payment is tied to a specific invoice or contract.
  • The account holder can provide documentation (invoice, purchase order, contract) linking the payment to their business activity.
  • Compliance may request these documents for any inbound transaction that does not originate from the account holder’s own named bank account.
Example: Funds received from a payment processor (Stripe, Nuvei, etc.) A business sells products online and collects payments through a payment processor like Stripe or Nuvei. The processor then settles funds into the business’s EngageXPay virtual account. This is permitted, provided:
  • The business has a verified account with the payment processor under the same legal name as the entity onboarded with EngageXPay.
  • EngageXPay will require a letter or document confirming the account relationship between the business and the payment processor.
Because the funds beneficially belong to the account holder even though they arrive via a processor, this is permitted. Example: Nested flow (not supported) A developer or account holder receives a virtual account and instructs multiple third parties to send funds directly into it, pooling money from parties who have not themselves been onboarded with EngageXPay. This is not permitted. Each transacting party must be individually onboarded and issued their own virtual account. Example: Disclosed financial intermediary (permitted with prior acceptance) If your business is a licensed money services business, payment service provider, or similar financial intermediary and you wish to use a virtual account in that capacity, you must disclose this to EngageXPay in advance during onboarding. EngageXPay will assess the relationship separately and either accept, condition, or decline it. Do not begin transacting on that basis without written acceptance from EngageXPay.

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Documents EngageXPay may request for higher-risk or high-volume activity

For payments that are high in value, high in volume, or that raise compliance questions, EngageXPay will request the following if they were not already provided at onboarding:
  1. Purpose of the payment.
  2. Proof supporting the purpose (e.g., invoice, contract, or purchase order).
  3. Source of funds.
  4. Proof of source of funds.
  5. For customers based in or transacting to higher-risk jurisdictions, EngageXPay may also request additional recipient and counterparty information.
These requirements apply to any transaction pattern or jurisdiction that triggers a compliance review, regardless of the individual payment size.

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Restricted business activities

Certain business types and activities cannot be facilitated through EngageXPay. See Restricted and High-Risk Businesses for the full list.

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Frequently asked questions

Yes, if the funds beneficially belong to you. Payments from a named third party, such as a payment processor (Stripe, Nuvei, Adyen), a supplier, or a customer of yours, are permitted where you can demonstrate a legitimate business relationship and the funds are yours. What is not permitted is receiving funds that beneficially belong to another person, for example by pooling money from multiple people who have not themselves been onboarded with EngageXPay.
Yes. EngageXPay requires KYC (for individuals) or KYB (for businesses) on every customer before they can receive a virtual account or transact. You cannot use your own virtual account to receive funds on behalf of your customers.
No. This is a nested flow and is not supported. Each customer must be onboarded separately and issued their own virtual account. Using a single account to pool third-party funds would classify the activity as operating a money service business, which EngageXPay cannot facilitate.
Yes, as long as you have a verified account with the payment processor under the same legal name as your EngageXPay account, and you can provide a letter or document confirming the relationship. Because the funds beneficially belong to you, this is permitted.
EngageXPay’s compliance team may flag the transaction and request supporting documentation such as an invoice, contract, or proof of business relationship. If the payment cannot be verified as legitimate first-party activity, it may be returned or the account may be restricted.
Yes. As part of the developer onboarding process (KYB), if your entity meets the eligibility criteria of our banking partners, you will receive a virtual account automatically.
EngageXPay may request: (1) purpose of payment, (2) proof of purpose (invoice, contract), (3) source of funds, (4) proof of source of funds. In high-risk jurisdictions, recipient information may also be required. These are standard compliance requirements and apply to all high-volume activity.
Not by default. EngageXPay does not support developers using virtual accounts to run money service businesses, payment processing operations, or other financial institution activities without prior disclosure and written acceptance. If your business model does involve licensed intermediation, you must disclose this at onboarding. EngageXPay will assess it separately and either accept, condition, or decline the relationship. See the restricted business activities page for the full list of activities EngageXPay will not support.
At Virtual Account onboarding, every developer accepts EngageXPay’s Developer No-Nesting Terms and every end customer accepts EngageXPay’s Customer No-Nesting Terms. These set out your commitment not to use a virtual account for nested activity, and EngageXPay’s rights if you do. Acceptance is a condition of Virtual Account issuance and continued availability. You can request a copy of the version you accepted at any time.