Non-bank providers of accounts and payment services are authorised or registered by the FCA under separate categories, and the safeguarding rules for customer money differ by category.
The FCA's categories for e-money and payment firms and its safeguarding rules, in factual terms.
The FCA states that a firm providing payment services as a regular business in the UK must be authorised or registered as an authorised payment institution, small payment institution or registered account information service provider, unless it is already another type of provider or is exempt.
The FCA defines electronic money as electronically stored monetary value represented by a claim on the issuer, issued on receipt of funds for making payment transactions; issuing it in the UK requires FCA authorisation or registration unless the firm has a Part 4A FSMA permission or is exempt.
The FCA's application routing distinguishes authorised and small e-money institutions: a firm projecting average outstanding e-money above 5m EUR must apply as an authorised EMI, otherwise it may register as a small EMI (SEMI), which cannot provide account information or payment initiation services.
On the same FCA page, a payment services firm projecting monthly average payment transactions above 3m EUR over 12 months must apply as an authorised payment institution; below that it may choose registration as a small payment institution.
The FCA says the Payment Services Regulations 2017 and Electronic Money Regulations 2011 require firms to safeguard customer funds against insolvency, under regulation 23 of the PSRs and regulation 20 of the EMRs together with CASS and SUP rules.
For authorised payment institutions, authorised EMIs and small EMIs safeguarding is mandatory and a condition of authorisation or registration; relevant funds are either segregated from other funds or covered by insurance from an authorised insurer or a comparable guarantee.
Small payment institutions, and small EMIs for unrelated payment services, can choose to safeguard; if they do, they must apply the same level of protection expected of authorised payment institutions.
FCA safeguarding rules include daily internal and external reconciliations, maintained resolution packs to return funds quickly on failure, safeguarding audits, and monthly safeguarding reports to the FCA within 15 business days of month end.
Payment Services Regulations 2017 and Electronic Money Regulations 2011 — Financial Conduct Authority
Apply to become an electronic money or a payment institution — Financial Conduct Authority
Safeguarding requirements for payment institutions and e-money institutions — Financial Conduct Authority
Fact sheet last reviewed 2026-09-28. Jurisdiction rules are confirmed against the sources above; a provider's own requirements differ and are confirmed by the provider.
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The FCA defines electronic money as electronically stored monetary value represented by a claim on the issuer, issued on receipt of funds for making payment transactions; issuing it in the UK requires FCA authorisation or registration unless the firm has a Part 4A FSMA permission or is exempt.
For authorised payment institutions, authorised EMIs and small EMIs safeguarding is mandatory and a condition of authorisation or registration; relevant funds are either segregated from other funds or covered by insurance from an authorised insurer or a comparable guarantee.
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