Originally Posted by rowan

I'm also worried that Epass might be using a fractional reserve system, in other words, they do not actually have physical "possession" of the sum of their customer's balances... part of that gets tied up in outside investments. The system works (usually) because with enough customers there's an average minimum balance - anything above that (plus a safety margin) can be used for other investment purposes without affecting the company's ability to handle the usual daily deposit and withdrawal operations. Trouble is if those investments lose money then it could be the start of a downward spiral, where the sum of their available cash and unrealised investments is less than the sum of the customer's balances. In other words, they can't pay out everyone. A run on the bank (where a large number of customers withdraw all their money) could leave the remaining customers with cents in the dollar, or nothing.