How Peanut Card Funding Works

Your Peanut card is funded by your own self-custodial wallet — Peanut never holds your money. To make card swipes feel instant, a small slice of your wallet is parked in a collateral account that the card network can authorize against in real time. Everything above your card limit stays in your smart wallet, always under your control.

Why a collateral account?

Card networks (Visa, Mastercard) authorize a swipe in milliseconds. They cannot wait for an on-chain transaction to confirm. So when you tap your Peanut card, the merchant sees an instant yes/no from the card processor — not from your wallet.

For this to work safely, the card needs a pool of funds it is allowed to draw from without asking your wallet. That pool is the collateral account.

• Peanut only ever keeps up to your card limit in collateral.
• The rest of your balance stays in your smart wallet — fully self-custodial, always accessible to you for sends, payment links, requests, withdrawals, and crypto transfers.
• You can raise or lower your card limit at any time from the Card screen. Lower limit → less in collateral, more in your wallet.

The two-minute cool-down between card spends

When you spend from your card collateral — whether that's a card swipe, a P2P send, a QR payment, or a bill split — the network issues a single short-lived signature that authorizes that one withdrawal. To prevent the same signature being reused (double-spend), the system enforces a brief lock on requesting the next signature.

In practice this means:

• Your swipe completes instantly. The cool-down is on the next signature, not the current one.
• The lock typically lasts up to a couple of minutes before you can authorize the next collateral-backed spend.
• It does not block payments out of your smart wallet — sends, link claims, and crypto withdrawals from your wallet balance are unaffected.

If you see the "Please wait" message and the in-app timer, that is what is happening. Once the timer hits zero, you can spend again.

How to avoid the cool-down

If you regularly chain card-backed payments together (e.g. splitting a bill, then paying a friend, then a QR), and don't want to wait between them:

• Lower your card limit to be at or below the amount you typically carry in your wallet. Anything above the limit sits in your smart wallet and can be spent without the cool-down.
• Use the smart-wallet rail for the second payment. P2P sends, Peanut Links, and crypto withdrawals can pull straight from your wallet balance without touching collateral.

Are my funds safe?

Yes. Peanut is fully self-custodial:

• Your smart wallet lives on Arbitrum, backed by your device passkey. Only you can move funds out of it.
• The collateral account is also yours — it is a smart-contract-bound balance topped up from your wallet, not held by Peanut.
• Peanut cannot freeze, seize, or reverse anything. If Peanut goes away, you can still move your funds with any compatible wallet.

For the full security and custody model see Security & Fund Safety.