We take our responsibility of keeping your money and data safe very seriously. To ensure that your money is safe and protected, we comply with industry regulations and aim to be as transparent as possible.
The rest of this article explains how your money is protected in practice.
Safeguarding your money
You probably know that wamo isn't a bank. The business accounts we provide are powered by our service provider, Modulr. Modulr is an Electronic Money Institution (EMI) licensed and regulated by the Financial Conduct Authority (FCA) in the UK and De Nederlandsche Bank (DNB) in the EU.
Being an EMI and not a bank, Modulr is required to hold 100% of your funds at all times in segregated accounts at a bank, where they cannot be used for any other purpose. Lending out or investing any client funds is something we or Modulr are not allowed to do and will never do, so you can be sure that your funds are secure in their safeguarded account. This process is called safeguarding and is different to how your money is protected by credit institutions (banks).
Safeguarding is done in accordance with requirements by The Electronic Money Regulations 2011 and The Payment Services Regulations 2017. Modulr’s safeguarding practices undergo independent yearly external audits.
Where is your money safeguarded?
Funds in your safeguarded EUR (€) accounts will be held exclusively with JP Morgan while funds in your safeguarded GBP (£) accounts will be held exclusively with the Bank of England.
Money security beyond traditional banking
While we're not a licensed bank, the established safeguarding practices are in place to protect your funds.
Traditional credit institutions or banks protect your money through the Financial Services Compensation Scheme (FSCS) in the UK and Deposit Guarantee Scheme (DGS) in Europe. In the event of a traditional bank becoming insolvent, these schemes protect your funds up to a limited amount, meaning that eligible customers will be paid back up to the maximum compensation amount of £85,000 under the FSCS and €100,000 under the DGS.
In the unlikely scenario of Modulr or wamo stopping operations, all of our customers' funds will be paid from the safeguarding account. As this secured money cannot be used for any other purpose, there will be enough in the account to cover all customer balances, at all times. Also, since your funds are segregated from Modulr's and our own funds, creditors are not able to make a claim on your funds.
If Modulr is unable to cover the cost to distribute your funds to you, then you will receive all your money back minus this potential costs (for example the cost of an insolvency professional). The pay-out may take longer than it would under the FSCS or DGS.
We hope that after reading this article, you now have a better understanding of how your money is protected in your wamo account. If you have any questions about this, please reach our support team via email@example.com or via our live chat - we're here 7 days a week.
Otherwise, we invite you to read more about how Modulr keeps your money safe directly from them.