Which is the best bank for a safeguarding account?

The answer depends on many factors. Some banks will offer accounts to startups and “prospective” PSPs (those applying or minded to approve).  Some banks only give safeguarding accounts to Authorised firms as opposed to small payment institutions or small e-money institutions.  It would take a 5 minute conversation normally to determine the most appropriate option.

What’s the difference between a ringfenced account, a segregated account, a safeguarding account and a CASS account?

Ringfenced and segregated accounts are interchangeable, they are a method of separating client funds from the company’s own funds,  or separating parts of a business’ funds,  such as retail and corporate funds. One does not need to be an FCA authorised firm to obtain a ringfenced account.

A safeguarding account is specific type of ringfenced account used by e-money and payment service firms to comply with the Safeguarding rules prescribed under the Payment Service and Electronic Money Directives.

A CASS account is another specific type of ringfenced account the meets the precise requirements of the FCA’s “Client Asset Sourcebook” – which is where the CASS initialism comes from.

Does my account have to be with a bank?

There are 2 other methods available to payment and e-money firms.  One is an insurance bond,  but regulators insist you have a separate safeguarding account should the policy payout.  In that sense, the insurance bond does not solve a great deal.

You can also invest the relevant funds (the funds that belong to the payment service user or e-money holder) with an Authorised Custodan in “zero risk” assets. We work closely with a well-known Custodian and can introduce you for GBP, EUR and USD safeguarding accounts.

Is there a bank that is very likely to grant approval for a safeguarding account?

Yes, AuthoriPay have worked very closely with 2 of its banking partners to offer a near guaranteed solution for compliant EU and UK based payment service and e-money firms.  Many MSBs were badly affected by BFC suddenly closing their accounts and were left with no choice but to suspend trading.  We were determined to solve this issue.

The FCA say I must withdraw my application because I don’t have a safeguarding account!

Then you should have contacted us sooner!   But we can have your account approved in 14 days if you act fast and have a recent AML audit.

Can an e-money firm get a free Safeguarding account?

In certain circumstances we can provide accounts with no setup or monthly fees.

Where can I get a USD safeguarding account?  Where can I get a GBP safeguarding account?

We can cover GBP, EUR and USD.

Can I have a dormant safeguarding account to meet regulatory requirements from the FCA?

You must have a safeguarding account as an API, SEMI or AEMI.  If there are no relevant funds then the account can indeed by dormant or empty as long as you never hold client funds after the end of next working day.

How can I earn interest on my safeguarding account balance as I have a very high balance?

We can help you open high interest bearing accounts for large balances in GBP, EUR and USD. 

Can I get a multi-currency safeguarding account?

Yes you can,  GBP safeguarding is one of the most challenging and expensive currencies. A safeguarding account in EUR is cheapest and easiest to obtain. We have numerous banking partners, some of whom cover the major currencies and some even offer up to 24 currencies. While the Payment Service / Electronic Money Regulations and the FCA allow you to safeguard all currencies in a base currency, at an appropriate conversion rate,  transaction costs often encourage safeguarding funds in their “native” currency.

Which is the quickest bank for safeguarding / segregated accounts / ring-fenced accounts?

For customers willing to pay a premium we can have an account opened within 7-10 days. If your banking issue is an emergency we recommend phoning us immediately, as we take up to 1.5 working days to respond to website and email queries.

Where can a startup, or newly authorised fintech get a safeguarding account?

There are only a few options for startups,  many prospective payment service and electronic money institutions waste months applying to UK high street banks only to be declined for reasons that were plainly obvious at the very start of the application, such as less than 10 staff or turnover below £6.5m

Another e-money firm has offered me a safeguarding account, will that be good enough?

Sadly not, the account must be with a Credit Institution in the UK / EEA / OECD, or an Authorised Custodian in the UK to satisfy the regulatory requirements. We have over 20 EEA banks to choose from, up to 24 currencies, virtual IBAN issuing available, nobody has more expertise in this sector.

Our bank is closing our ringfenced account because we are not FCA authorised,  what can we do?

For many clients we speak to, their first instinct is to ask, “how can I become FCA authorised?”  Applications are an expensive and long-winded pursuit with no guarantee of success. AuthoriPay can solve your banking issue without the need to become FCA authorised, if your existing business is exempt from the regulations.  If you don’t offer a regulated service, then it is certainly not recommended to apply for a licence – it will be refused.

What are the other options for safeguarding funds?

For relevant funds held at the end of next working day, another option is to invest them in secure, liquid assets with an Authorised Custodian. AuthoriPay has an excellent relationship with one of the world’s largest Authorised Custodians and can obtain GBP, EUR and USD safeguarding accounts, subject to your passing an AML audit.

What’s a good replacement for Baltic International Bank (BIB)?

In December 2022, Latvia’s Financial and Capital Market Commission supended BIB’s provision of financial services. There were many payment service and e-money firms using BIB for safeguarding. For those that lost their accounts, we have an alternative provider with rapid account opening capabilities.

LHV have given notice of increased pricing to €15,000 a month.   Can I find a new safeguarding account in the next 60 days

LHV have operated in Fintech for many years charging around €3000 per month.   The sudden increase in LHV’s safeguarding account pricing will come as a great shock to many Fintechs trying to keep their costs down. We have many alternative options to LHV for safeguarding and operational accounts.

What’s the quickest and cheapest Ringfenced account?

Get in touch and we’ll tell you!

Where to find safeguarding account for MSBs?

We have 97% approval rate for MSBs and Deliverable FX firms in need of a safeguarding bank account.

What are safegaurding accounts called in other European Languages?

1. French: Compte de Séquestre ou compte de Garantie
2. German: Treuhandkonto oder Sicherungskonto
3. Spanish: Cuenta de garantía o cuenta de custodia
4. Italian: Conto di Garanzia o Conto di Deposito
5. Portuguese: Conta de Garantia ou Conta de Custódia
6. Dutch: Bewaarrekening of Zekerheidsrekening
7. Swedish: Förvaringskonto eller Säkerhetskonto
8. Danish: Sikkerhedskonto eller Varetægtskonto
9. Norwegian: Sikringskonto eller Deposittkonto
10. Finnish: Turvakäyttötili tai Vakuustili

Why is safeguarding funds such a big issue?

European payment service and e-money regulations dictate that most payment or e-money licence holders must segregate “relevant funds” and not incorporate them into their own working capital.  This is typically achieved through a client segregated or safeguarding bank account with any UK / EEA / OECD based Credit Institution.  Such accounts cannot be accessed by third parties and are separate from the current account belonging to the company to whom the funds are transferred. The Credit Institution must have no right to “set-off” any owed funds from this account.

Unfortunately, UK high street banks have been reluctant to offer safeguarded accounts creating a huge entry barrier for payment firms. BFC and Baltic International Bank in Lativa recently culled many payment service and e-money clients with little notice. Many banks are de-risking and removing ringfenced accounts for firms that are not FCA authorised.  Despite PSD2 mandating that banks treat payment service providers on a Proportionate, Objective and Non-Discriminatory basis (POND),  some major banks continue to flout these rules and most European regulators have yet to clamp down on these practices.

Through our tireless work we have managed to find solutions to this regulatory hurdle. We have a network of 21 EEA based Credit Institutions with differing acceptance criteria, account opening timeframes and costs. We also work closely with one of the world’s largest Authorised Custodians.  We will find the best fit for your business.  If you need a multi-currency safeguarding account in a hurry  get in touch with us today