E-Money in the United Kingdom - A Case Study

Paola Crosetta ()
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Paola Crosetta: Financial Services Compensation Scheme

No 4, IADI Fintech Briefs from International Association of Deposit Insurers

Abstract: The Financial Services Compensation Scheme (FSCS) is the UK's statutory fund of last resort for customers of authorised financial services firms. It is an integrated compensation scheme covering not only deposits but also investment and insurance provision and intermediation, debt management, pensions, and home finance. FSCS is a statutory body created under the Financial Services and Markets Act 2000 (FSMA). FSCS does not provide coverage for electronic money (e-money). There is consumer protection for e-money and payment services via regulatory rules, but they are related to safeguarding requirements for customer funds. Any decision to extend FSCS coverage would be as a result of a legislative change and/or changes to regulatory rules and would be subject to public consultation. As of December 2020, there are around 1200 e-money and payments services firms operating in the UK. The growing presence of these players in the UK market brings challenges and opportunities for both consumers, who are increasingly dealing with these products, and regulators, as questions arise on how to best protect consumers if these providers, or the underlying institution holding the safeguarded funds, fail.

Keywords: deposit insurance; bank resolution (search for similar items in EconPapers)
JEL-codes: G21 G33 (search for similar items in EconPapers)
Date: 2021-09
New Economics Papers: this item is included in nep-ias, nep-mon and nep-pay
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Citations: View citations in EconPapers (1)

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