POBO & COBO Account Structures: Named, Virtual and FBO

Part of our POBO & COBO Solutions guide.

The Problem

POBO and COBO are transaction concepts, not account products. The same on-behalf-of model can be implemented through very different account structures depending on whether the users are subsidiaries or unrelated customers.

The correct design starts with the flow of funds: who owns the funds, who owes or is owed money, who owns the external bank account, what the relationship is between the parties, and whether the underlying parties are related group companies or external customers.

Typical Flow

The diagram is intentionally generic. Actual implementation depends on the legal entities, jurisdictions, bank/provider rules, payment rails, currencies, licensing status, and reconciliation model.

Named Corporate Account

Appropriate where a treasury entity or company is moving its own/group funds.

Virtual Accounts

Useful for allocating incoming receipts or creating unique references without opening a physical account for every underlying party.

FBO / Pooled Accounts

Often relevant where external customer funds are held within a regulated program.

Internal Ledger

Essential for tracking economic ownership when the external bank sees only a central account.

Core Design Questions

Who is the legal account owner?
Who is the economic owner of the funds?
Who is the debtor and who is the ultimate debtor?
Who is the creditor and who is the ultimate creditor?
Are the underlying parties related companies or external customers?
Which countries and currencies are involved?
Which rails are required?
What monthly volume and transaction count are expected?
Is a named, virtual, pooled, FBO, or safeguarded account required?
Who performs KYC/KYB, sanctions screening, and transaction monitoring?
How will the internal ledger and reconciliation work?

What We Can Help With

We can help map the transaction, identify the appropriate banking/payment architecture, determine what type of provider is required, prepare the provider-facing flow of funds, and source or introduce suitable banks, PSPs, MSBs, or program partners where there appears to be a fit.

Frequently Asked Questions

Is a virtual account the same as a bank account?

Not necessarily. It may be an identifier or sub-ledger under a master account.

Is POBO itself an FBO product?

No.

Get Help Designing This Structure

Send us your entity chart and flow of funds. If you do not have a diagram, describe who pays, who receives, who owns each account, what the underlying obligation is, and where the money ultimately goes.

Book a Payments Solution Consultation

POBO & COBO Account Structures: Named, Virtual, FBO, and Pooled Accounts