The compensation scheme will not pay out on an e-money account, and safeguarding is what stands in its place

The page I expected, and the 404 I got

I had assumed the compensation scheme would have a page for e-money under the heading of what it covers, sitting next to the one for banks. The address I guessed returned a 404. So did the one I guessed on the regulator's consumer site, which I had expected to carry at least a paragraph on it, given how many small companies now keep their first balance with a firm that is not a bank and has never claimed to be one. That was the first surprise of the morning, and it turned out to be the answer rather than a gap in it.

What the scheme does have is a news article, published on 11 May 2023 and carrying a later note about the new limits. It is blunt: "We can't protect the money you have with e-money institutions and payment providers." The same article says it can only protect money held with banks, building societies and credit unions regulated by the Prudential Regulation Authority.

So is an e-money account protected by FSCS? It is not, on either count. The 120,000 pound limit that applies from 1 December 2025, and the 1.4 million for temporary high balances, belong to deposit takers. An account with an e-money firm sits outside both, however much the app looks like a bank.

That matters for a UK company run from abroad more than for most. I suspect the account a non resident director can open quickest online is often not a bank account at all, and you should know which kind you have before the balance grows.

What the register says, in the firm's own entry

I opened the Financial Services Register this morning and searched for firm reference 900876. It is Airwallex (UK) Limited, Companies House number 10103420, shown as an Authorised Electronic Money Institution since 26 November 2018.

The entry carries a warning box before anything else. "If this firm goes out of business owing you money you will not be able to claim compensation from the Financial Services Compensation Scheme (FSCS)." Lower down it adds that the firm "may be required to safeguard funds it receives", and that after an insolvency "you should contact the liquidator or administrator of the firm".

I find that sequence more honest than most marketing pages. The regulator puts the thing you are least likely to want to hear at the top, and it does so on the entry of a firm it authorised.

None of this is a criticism of that firm, which has held its authorisation for almost 8 years, or of e-money as a product. It is a description of what kind of promise the account makes.

What safeguarding is, in the regulations

Safeguarding is the protection an e-money balance gets instead. The FCA's page on it says the Payment Services Regulations 2017 and the Electronic Money Regulations 2011 "require firms to take steps to protect customer funds in the event of insolvency". The rules sit in regulation 23 of the first and regulation 20 of the second, with detail in chapters 10A and 15 of the Client Assets Sourcebook.

There are 2 ways to do it. The firm keeps the money segregated from its own funds, or it covers the money with an insurance policy from an authorised insurer or a comparable guarantee.

For authorised payment institutions, authorised e-money institutions and small e-money institutions, safeguarding is mandatory and a condition of being authorised or registered. A small payment institution can choose to safeguard, and has to tell the FCA whether it does, when it applies and in its annual return.

What I had missed until today is that last line. I would not skip it. A small payment institution that has chosen not to safeguard is a different animal from an e-money firm that must, and both can look identical from inside an app.

What changed on 7 May 2026

The FCA's safeguarding page was updated on 7 May 2026, and the update note says why: new safeguarding rules had come into effect. It lists what firms now owe, item by item.

Internal and external reconciliations at least once each reconciliation day, a day that excludes weekends and bank holidays. Resolution packs, kept up to date, so that money can be returned quickly if the firm fails, and safeguarding audits on a fixed clock, the first due within 6 months of the end of the audit period and every later one within 4 months, which for a firm with a December year end means a report on the desk by the end of April. That is a lot of paperwork. A monthly safeguarding return on form REP027, within 15 business days of the end of each month.

Firms that rely on insurance must have a contingency plan in place 3 months before a policy expires. And the obligation to safeguard begins as soon as the firm is entitled to the money, often the moment it lands in an account in the firm's name.

I have read those rules as a customer rather than as a firm, which is the only way I am qualified to read them. My guess is that the resolution pack does more for a company treasurer than anything else on the list, because it decides how long money is stuck after a failure, and time is the thing a small company runs out of first.

The FCA ran a webinar on the new regime on 18 November 2025. I have not watched it.

How long the money can be stuck

This is where the difference stops being theoretical. The FSCS says that when a deposit taker fails it will step in and return your money, usually automatically and within 7 days. That is a number you can plan around. For money held under a trust arrangement between providers, its article says the usual service will take longer, up to 3 months.

For an e-money firm there is no scheme payment at all. The article's phrase is that your money "could be tied up for a while during the insolvency process". I went looking for a published average for how long that has taken in UK e-money failures and found none. I am not going to invent one.

For a company that pays staff monthly, a week and an open ended wait are not the same risk, and the gap between them is the whole case for keeping 2 accounts rather than 1, which costs a second set of onboarding forms and very little else. I would hold payroll money, and the tax reserve, with a deposit taker, and keep the e-money account for what it is good at, which is usually currency and speed.

That is the rule I would follow, and I would not dress it up as more than a rule of thumb.

Checking a provider before you open the account

A directory is the quick way to see who exists. Bank Index, an independent public listing built from regulators' registers and each company's own pages, has the list of licensed e-money institutions in the UK at 408 names on 23 September 2026, sorted by letter, with 53 under P and 33 under T.

The UK section of the same directory counts 1,532 companies in all, including 521 banks, so it is easy to put an e-money firm and 2 or 3 banks side by side before you apply anywhere. Its Airwallex card gives the same FCA reference, 900876, that the register shows.

It has 3 limits I would name before anyone relies on it. The list is built from register data read in batches, so a firm authorised or cancelled this week may not match yet, and a card that carries only its register line tells you little beyond the fact of the licence. I also cannot tell from the list whether a firm is authorised or small, and for safeguarding that is the distinction that matters.

So the register comes last, on the day you open the account. Search the firm name or reference, read the status line, and read the warning box. It takes about a minute. The answer is dated.

A short digression about the word account

An aside about naming, because it causes half the confusion. The FSCS article makes the point about pots, pockets, vaults and spaces: whatever the product is called, what matters is who holds the money and how.

Some e-money apps also let you open a savings product with a bank inside their own interface, and that money can be protected, because it is held by a deposit taker. The same app can therefore show you 2 balances, one protected and one safeguarded, on the same screen.

I still find that slightly absurd. Anyway, the fix is the same: find out which legal entity holds each balance, in writing.

What I cannot tell you

I do not know how any particular firm safeguards, segregated or insured, because the register does not say and firms describe it in their own terms. I would ask each firm in writing, keep the reply with the account opening pack, and read it again whenever the firm changes its terms, because a firm can move from segregation to insurance without the app looking any different.

I do not know how long distributions have taken in past e-money insolvencies, whether 3 months or 3 years. The FSCS says only "a while", and the safeguarding rules aim to shorten it rather than to fix a number.

And I still do not know why the obvious address for an e-money page on the compensation scheme's site returns nothing. I keep thinking about how many people type that same guess, get the same 404, and conclude that nobody knows.