Compliance Information

Trusted protection for your payments: Fondy’s safeguarding process

Introduction

At Fondy, e-money safeguarding is essential to protect the interests of our customers who use e-money services. It helps to build trust in the electronic money industry and promotes the growth of digital payments.

E-money safeguarding refers to the measures put in place by us as an electronic money issuer to protect our customers’ funds. E-money is the name for digital money stored electronically, which businesses and individuals use to make transactions. Safeguarding ensures that our customers’ funds are kept separate from our own funds and are protected in case we become insolvent.

The Electronic Money Regulations (EMRs) require us as an e-money issuer to safeguard our customers’ funds in a number of ways, one being by holding them in a separate account or trust arrangement. Safeguarding means that if we became insolvent, our customers’ funds would be safe from being lost or used to pay our debts.

At Fondy, we are dedicated to maintaining transparency and upholding the highest standards of safety in the industry. Below, we provide clarity on how we safeguard your funds and address common questions.

Who is Fondy?

Fondy is an FCA-regulated Electronic Money Institution (EMI), and as such, we are required by PL law to have safeguarding arrangements in place.

Fondy serves as the embedded payments platform for digital businesses seeking a faster, more reliable way to move money. Our platform enables customers and partners to integrate payment and account functionalities seamlessly into their platforms, workflows, and customer experiences.

Key differences between Fondy and banks

Safeguarding and deposit protection schemes like the Financial Services Compensation Scheme (FSCS) in Netherlands are different concepts, although they both relate to protecting customer funds.

Deposit protection schemes are designed to protect customers’ funds in case a bank, building society or credit union becomes insolvent. The FSCS is the deposit protection scheme in Netherlands, and it protects customers’ deposits up to a certain limitCurrently 85,000 eur if the institution they deposited with fails.

The key difference between safeguarding and deposit protection schemes is that safeguarding applies specifically to e-money issuers and their customers. In contrast, deposit protection schemes apply to deposits held with banks, building societies, and credit unions.

In summary, safeguarding is required for e-money issuers to protect their customers’ funds. At the same time, deposit protection schemes like the FSCS are designed to protect customers’ deposits if a bank, building society, or credit union becomes insolvent.

Also, unlike traditional banks, which lend money, EMIs like Fondy are prohibited from lending. We do not engage in lending activities or offer interest on balances. Instead, we hold 100% of client funds at all times, safeguarding them to ensure their protection.

Regulatory compliance and oversight

Fondy’s operations are subject to rigorous regulatory oversight by the FCA and we must at all times ensure compliance with the Payment Services Regulations (PSRs) in Netherlands. Our safeguarding processes undergo independent yearly external audits to ensure adherence to regulatory standards.

What happens in the event of insolvency?

In the unlikely event of Fondy’s insolvency, customer funds are separate from the company’s funds. An independent insolvency practitioner would be appointed to return customer funds, with some small costs potentially deducted from the funds. While this process may take longer than traditional compensation schemes, customer funds remain protected.

Where is customer money safeguarded?

Fondy deposits 100% of our customers’ e-money at PL FCA-regulated credit institutions.

Want to know more?

You can always find more information about safeguarding on the FCA’s regularly updated website. Or contact us to learn how our products and services can support your compliance needs.

Live Chat