Digital Banking Solutions

Overview

Lithic provides the core infrastructure to build modern digital banking experiences, from neobanks to embedded banking products. By combining our ledger offering with card issuing and payment rails to move money, you can offer a complete banking solution to your customers.

Digital banking on Lithic supports both consumer and commercial use cases, with real-time balance tracking, instant card issuance, and flexible funding options. Whether you're building a standalone neobank or embedding card and accounts into your existing product, Lithic's API-first platform provides the foundation you need.

Key Features for Digital Banking

Real-Time Balance Updates

Lithic's ledger processes transactions in real-time, providing instant balance updates across all money movement types:

Card authorizations immediately reduce available balance
ACH receipts post 6x daily with instant balance increases
Book transfers execute instantly with same-second balance updates

Flexible Funding Options

Support multiple funding methods to meet customer needs:

ACH Push: Direct deposits from employers and benefits
ACH Pull: Customer-initiated transfers from external accounts
Book Transfers: Internal movement between accounts

Comprehensive Transaction History

Provide customers with detailed transaction records:

Complete transaction lifecycle from authorization to clearing
Merchant information (name, MCC, location)
Snapshot of the transaction's state

Regulatory Compliance

Built-in compliance features for banking products:

KYC/KYB verification workflows
RESERVE financial account types available for prepaid program compliance
Statements API for credit products

Core Capabilities

Account Management

Financial Accounts: At the heart of digital banking is Lithic's financial account system, which provides real-time balance tracking and double-entry accounting:

ISSUING accounts: Track card spend and balances for each customer
OPERATING accounts: Manage non-card transactions like ACH transfers and internal movements
Balance types: Accounts can hold a prepaid balance (funds stored), or a credit balance (funds owed). Within prepaid or credit financial accounts, Lithic tracks available balance, pending balance, and total balance

Account Holders: Create business or individual account holders

Automatic financial account creation for each account holder
Update capabilities for customer information (address, phone, contact details)

Card Issuance

Issue both virtual and physical debit cards to your customers instantly:

Virtual Cards:

Instant issuance via API
Immediate availability for e-commerce and digital wallet transactions
Can be converted to physical cards later
Support for Apple Pay and Google Pay in-app or web push provisioning

Physical Cards:

Manufacturing: Integrated with many card personalization bureaus for all types of card printing options.
Support for in-store POS, contactless NFC, chip, and magstripe
PIN management with encrypted PIN blocks
Support for Apple Pay and Google Pay provisioning

Card Programs: Configure card programs with specific BIN ranges, digital wallet art, and program-level settings.

Funding & Money Movement

Enable seamless money movement in and out of customer accounts:

Money Movement:

Same Day and Next-Day ACH: Process ACH push and pull transactions on all six ACH windows
Direct Deposits: Accept employer payroll and government benefits
Bill Pay + ACH Auth rules: Receive ACH debits from merchants and service providers, and use custom logic to define who and when can debit your customers’ accounts

External Bank Accounts:

Connect and save external bank accounts for funding and payments
Verify account ownership using micro-deposits or prenotes

Book Transfers:

Instant internal transfers between financial accounts
Move funds between customer accounts or from your operating account to customer cards
Support for dozens of transfer types: disbursements, card-to-card, account-to-account, collections, fees, and rewards

Transaction Controls

Provide customers with powerful spending controls and security:

Authorization Rules:

Conditional blocking based on merchant category, country, transaction amount, and more
Velocity limits (daily, monthly, annual spend caps)
Challenge authentication via SMS for suspicious transactions
Shadow mode for testing rules without affecting transactions
Backtest new rules on months of past transactions immediately

Real-Time Decisioning:

Authorization Stream Access (ASA) for custom approval logic
3-second response window for authorization decisions
Access to 150+ transaction data points
Integrate with your own fraud scoring and risk assessment systems

Digital Wallet Support

Modern payment experiences with digital wallet integration:

Apple Pay and Google Pay tokenization
In-app and web push provisioning
Customizable card art for wallet display
Tokenization decisioning (Lithic-managed or customer-managed)
Tokenization rules for better fraud controls

Implementation Guide

1. Account Onboarding

Create an account holder and associated financial accounts:

POST /v1/account_holders
{
  "individual": {
    "first_name": "Jane",
    "last_name": "Doe",
    "email": "[email protected]",
    "phone_number": "+15555551234",
    "dob": "1990-01-15",
    "address": {
      "address1": "123 Main St",
      "city": "San Francisco",
      "state": "CA",
      "postal_code": "94105",
      "country": "USA"
    }
  },
  "tos_timestamp": "2024-01-15T10:30:00Z",
  "workflow": "KYC_EXEMPT"
}

📘
Please perform your own KYC verification before onboarding customers for individual account holders using KYC_EXEMPT. Lithic-managed KYC for individuals will be available later in 2026.

Response includes the account_holder_token and automatically creates an ISSUING financial account.

2. Retrieve Financial Account

Get the financial account token that was automatically created:

GET /v1/financial_accounts?account_token={account_holder_token}

This returns the ISSUING financial account token needed for funding operations.

3. Issue Virtual Debit Card

Once the account holder is verified, issue a virtual card:

POST /v1/cards
{
  "type": "VIRTUAL",
  "account_token": "account_token",
  "state": "OPEN"
}

The card is immediately available for online transactions and digital wallet provisioning.

4. Connect External Bank Account

Enable ACH funding by connecting the customer's external bank account:

POST /v1/external_bank_accounts
{
  "owner": "Jane Doe",
  "owner_type": "INDIVIDUAL",
  "account_token": "account_holder_token",
  "account_number": "123456789",
  "routing_number": "123456789",
  "type": "CHECKING",
  "country": "USA",
  "currency": "USD",
  "verification_method": "MICRO_DEPOSIT",
  "financial_account_token": "issuing_account_token"
}

Verify the account using micro-deposits or prenote before enabling funding. The financial_account_token is used to fund the micro-deposits for verification.

5. Configure Authorization Rules

Set up spending controls for the customer:

POST /v2/auth_rules
{
  "account_tokens": ["account_holder_token"],
  "program_level": false,
  "state": "ACTIVE",
  "type": "CONDITIONAL_ACTION",
  "parameters": {
    "conditions": [
      {
        "attribute": "MCC",
        "operation": "IS_ONE_OF",
        "value": ["5813", "7995"]  // Block gambling and betting
      }
    ],
    "action": "BLOCK"
  }
}

6. Fund the Account

Transfer funds from the external bank account via ACH:

POST /v1/payments
{
  "amount": 50000,
  "external_bank_account_token": "external_bank_account_token",
  "financial_account_token": "issuing_account_token",
  "payment_type": "COLLECTION",
  "method": "ACH_NEXT_DAY",
  "method_attributes": {
    "sec_code": "WEB"
  }
}

Funds will be available based on the ACH settlement schedule (same-day or next-day).

7. Monitor Balances & Transactions

Track account balances in real-time:

GET /v1/financial_accounts/{financial_account_token}/balances

Response:

{
  "available_amount": 48500,
  "pending_amount": 1500,
  "total_amount": 50000,
  "currency": "USD",
  "last_transaction_token": "transaction_token",
  "last_transaction_event_token": "event_token"
}

Subscribe to webhooks for real-time balance updates:

financial_account.created: New financial account
balance.updated: Fired when account balance changes
transaction.created: New card transaction or payment

Use Cases

Consumer Neobanks: Full-featured digital banking apps with checking accounts, debit cards, and mobile payment capabilities.

Embedded Banking: Add banking features to existing products like payroll platforms, HR systems, or consumer apps.

Commercial Banking: Business checking accounts with expense management, employee cards, and ACH payments.

International Remittances: Multi-currency support with card issuance and ACH funding for cross-border payments.

Overview

Key Features for Digital Banking

Real-Time Balance Updates

Flexible Funding Options

Comprehensive Transaction History

Regulatory Compliance

Core Capabilities

Account Management

Card Issuance

Funding & Money Movement

Transaction Controls

Digital Wallet Support

Implementation Guide

1. Account Onboarding

2. Retrieve Financial Account

3. Issue Virtual Debit Card

4. Connect External Bank Account

5. Configure Authorization Rules

6. Fund the Account

7. Monitor Balances & Transactions

Use Cases

Related Documentation