safeguarding
Safeguarding is the FCA-supervised requirement, under the Payment Services Regulations 2017 and Electronic Money Regulations 2011, that payment and e-money institutions protect customer funds by segregating them in a designated account or covering them with insurance, so the money can be returned if the firm becomes insolvent.
When a regulated payments firm holds money on the way from a payer to a payee, that money is not covered by the Financial Services Compensation Scheme. Safeguarding is what stands in for it: the firm must hold relevant funds separately from its own, in a designated safeguarding account with an authorised bank, or cover them with an insurance policy or guarantee, and reconcile daily. The FCA strengthened the regime in PS25/12, with rules in force from 7 May 2026, after finding that firms that failed had often not safeguarded properly.
Why it matters to a software platform: safeguarding is the obligation a platform takes on if it becomes a payment institution or payfac and starts holding its customers' money. It is also the obligation it avoids under a regulated-partner model, where the regulated acquiring partner holds the funds and safeguards them throughout. The question a large customer's procurement team will ask, "are you regulated to hold our money?", has the answer: we do not hold it; our regulated acquiring partner does, under FCA safeguarding rules.
To be plain: Synapto does not hold, safeguard or move customer funds. What to watch: ask any provider who holds the money between payment and payout, under which authorisation, and how it is safeguarded. A provider that cannot answer in one sentence has not thought about it.
Sources
- FCA, Safeguarding requirements for payment institutions and electronic money institutions, 7 May 2026
- FCA, PS25/12 Changes to the safeguarding regime for payments and e-money firms (rules in force 7 May 2026), 7 August 2025
- The Payment Services Regulations 2017, regulation 23 (safeguarding requirements), 19 July 2017