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Redbanx Limited (“Redbanx”) is an Electronic Money Institution (EMI) authorised and regulated by the Financial Conduct Authority (“FCA”) under the Electronic Money Regulations 2011 (“E-Money Regulations”) to issue electronic money and provide payment services (firm reference number 900897).
Money you hold with Redbanx is issued as electronic money or “e-money”. This is not the same as a bank deposit.
Redbanx is not a bank. This means:
• we do not take your money as a deposit to use for our own purposes or to lend to other customers; and
• your e-money account is not covered by the Financial Services Compensation Scheme (“FSCS”).
For bank deposits, the FSCS protects eligible customers up to £120,000 per person. In contrast, EMIs must protect the full value of your e-money balance through a process known as “safeguarding”.
We protect our clients’ funds through safeguarding. This means that any money we receive from you, or hold on your behalf, is kept completely separate from Redbanx’s own operational funds. We use the segregation method:
• Once cleared funds are received from you, we issue e-money to your Redbanx wallet in line with the E-Money Regulations.
• An equivalent amount of money is placed into specially designated safeguarding accounts held with authorised credit institutions or banks.
• These safeguarding accounts are clearly identified and kept separate from Redbanx’s own funds. The authorised credit institutions holding these accounts have no rights over the safeguarded funds.
In addition to our safeguarding accounts, we may also use segregated client accounts with certain banking and payment providers to facilitate our payment and foreign exchange services. For example, these accounts may be used to process incoming funds from you and outgoing payments on your behalf.
It is important to note that:
• segregated client accounts are used for operational purposes and are not themselves safeguarding accounts; and
• client funds are not left in segregated client accounts overnight.
At the end of each business day, we ensure that client funds are appropriately transferred so that they are held within our designated safeguarding accounts at authorised credit institutions or banks, in line with regulatory requirements.
Because Redbanx is an EMI and not a bank, your e-money is not protected by the FSCS. Instead, your funds are protected by the safeguarding regime described above. In the unlikely event that Redbanx were to become insolvent:
• the money held in our safeguarding accounts would be used to meet clients’ claims;
• those claims would be paid from the safeguarding accounts ahead of other creditors, after deduction of any insolvency practitioner or liquidator costs; and
• the intention of the safeguarding regime is that the full value of your e-money balance (minus such costs) is returned to you.
However, it may take longer for you to receive your money than it would if your funds were held with a bank covered by the FSCS.
Further information on how safeguarding works for payment institutions and electronic money institutions is available in Section 10 of the FCA’s Payment Services and Electronic Money – Our Approach document."