UK EMI safeguarding rules in 2026: are your business funds protected?
FCA safeguarding changes took effect on 7 May 2026. Here is what European businesses should check about an EMI account, fund protection and access to settlement money.
The FCA's supplementary safeguarding regime for payment and e-money firms came into force on 7 May 2026. The changes were set out in policy statement PS25/12, published on 7 August 2025. This is an October business-customer briefing on rules already in force, not a claim that the FCA introduced them this week.
Safeguarding concerns the protection of relevant customer funds held by payment institutions and electronic money institutions. The strengthened regime includes reconciliation, reporting, audit and failure-planning requirements. The FCA describes daily checks, monthly reporting and annual safeguarding audits, with an exemption for certain small firms. The precise obligations depend on the firm's status and activities.
Is an EMI account the same as a bank account?
No. An e-money account can provide useful business-payment functions, but the legal nature of the balance and its protection differ from a bank deposit. Do not assume a familiar account number, card or banking-style application means you are holding a protected deposit with a bank. Check the legal entity providing the account and the permissions it holds, rather than relying on a product's marketing name.
Does safeguarding mean your money is insured?
Safeguarding should not be described as bank-deposit insurance or a promise of immediate, full recovery. Its purpose is to protect relevant customer funds through the applicable safeguarding arrangements. If a provider fails, returning money can still involve an insolvency process, delays and costs. Ask the provider to explain what protection applies to your particular balance and which organisation owes you the money.
What should business customers ask their EMI?
Ask how relevant funds are safeguarded, how the firm reconciles balances, and what information customers would receive if access were interrupted. Verify the provider on the FCA register and make sure the entity in the customer agreement matches the permissions you checked. Where an account is offered through an intermediary, establish which regulated firm actually provides the payment service.
Separately review settlement terms, withdrawal access, complaints handling and permitted business activities. Safeguarding does not prevent transaction monitoring, account restrictions or a provider declining a sector outside its risk appetite. A legitimate high-risk business still needs an accurate ownership chart, credible funding evidence and a clear explanation of expected transactions.
Avoid making one account your only payment route
For operational resilience, consider how salaries, supplier payments and customer refunds would continue if the main provider were unavailable. A second suitable arrangement can reduce dependency, but it is not a way to evade monitoring or restrictions. Xavion Capital helps European businesses assess banking and payment-provider fit, including the practical distinction between bank deposits and e-money settlement balances.
Faster onboarding and lower fees are not the whole decision. Understand fund protection and operational access before placing business-critical settlement money with an EMI or payment institution.