Zing is an Electronic Money Institution (EMI), not a bank or building society. Because of this we protect your money through a process called safeguarding, which is different to the way a bank does. As an EMI we are also different in a couple of other ways too:
- Zing doesn’t offer overdrafts or loans
- Zing doesn’t pay you interest on your credit balances.
What is safeguarding?
As an EMI we protect your money through a process known as safeguarding under regulatory guidelines. We put your money in a separate safeguarding account with a bank and adhere to all regulatory requirements relating to safeguarding. We keep your money separate from Zing’s, and hold it all as cash or liquid assets.
Our obligations to safeguard and protect your money start as soon as we receive the funds, subject to the requirement that they are safeguarded by the end of five business days after the date on which the e-money was issued.
This means we pay an amount into a separate safeguarding account which is:
- held with a bank that isn't part of our group; and
- equal to the amount of money we've issued to and/or received for our customers
What’s the difference between safeguarding and the Financial Services Compensation Scheme (FSCS)?
FSCS protection is backed by an independent organisation. If a company protected by FSCS goes out of business owing you money, this independent organisation reimburses your money, up to £85,000, even if your bank or building society doesn't have it.
If an EMI (such as Zing) goes out of business owing you money, you won’t be able to claim compensation from the FSCS or any similar scheme. Instead, you should contact the liquidator or administrator of the EMI, who will be responsible for distributing any funds to customers. You are reimbursed from the money that Zing has been holding in the separate safeguarding account with a bank. This bank account becomes an asset pool and Zing members’ money is paid back first, before other creditors.
Through safeguarding, Zing members will receive most, if not all, of their money even if Zing goes out of business owing them money. However, there are risks that the process may take longer than through the FSCS and they may not receive full reimbursement.
How do I know safeguarding is done in the right way?
To ensure we are performing our safeguarding duties in the right way for you and your money, we are subject to an annual independent audit.