Xoala is committed to keeping customer funds safe. Xoala is regulated and licensed in jurisdictions where it needs licences to operate. Xoala's services are provided in compliance with applicable laws and regulations. How Xoala protects its customer funds depends on the regulatory requirements of the jurisdictions where the relevant Xoala entity is licensed to operate.
Sweden
In Sweden, Xoala's operating company, Steven AB holds an Electronic Money Institution licence issued and regulated by the Finansinspektionen. As an e-money institution, Steven AB has implemented customer funds safeguarding procedures and measures that comply with rules set by Finansinspektionen under the Swedish Electronic Money Act.
As part of our EMI licence, we are required to ensure that customer funds are kept in designated safeguarding bank accounts and separated from Steven AB's own funds that it uses for its business operations. Customer funds are protected from the moment Steven AB receives the funds, until the moment our customers make a payout or request a redemption (withdrawal) from their account with Steven AB (“Wallet”). This means our customers' Wallet is fully backed by money that we hold in the Safeguarding Accounts, therefore, in the unlikely event of Steven AB ceasing business operations or going into insolvency, liquidation or bankruptcy, our customers' funds are unaffected and will be returned.
United Kingdom
In the United Kingdom, Xoala's operating company, Swipe International Limited holds an Electronic Money Institution (EMI) licence issued by the Financial Conduct Authority. EMIs must implement customer funds safeguarding procedures and measures that comply with rules set by the Financial Conduct Authority. As part of our EMI licence, we have put in place 'safeguarding' measures to protect all of our customers' funds in line with these rules.
The purpose of safeguarding is to ensure that customer funds are kept separate from Swipe International Limited's own funds that it uses for its business operations and are protected from the moment Swipe International Limited receives the funds, until our customers make a payout or request a redemption (withdrawal) of their balance. This means that the money that our customers receive into their Wallet is fully backed by money that we hold in separate bank accounts. The separately held money is only available for the purpose of giving our customers back their money on their request. In addition, this separately held money is not available to any of Swipe International Limited's creditors, our banks or third parties. It means that whenever our customers ask us to redeem (withdraw) their e-money or make a payout, that money will be available.
In the unlikely event of Swipe International Limited ceasing business operations or going into insolvency, liquidation or bankruptcy, our customers' funds kept with us will be safely set aside in the safeguarding account, and they receive them back in priority to all our other creditors. Please do note that the appointed insolvency practitioner who would be distributing our customers' funds back to them, may charge a standard fee by deducting from the balance of customers' accounts prior to returning the funds. This fee is not charged by Swipe International Limited.
You may have heard of the Financial Services Compensation Scheme (“FSCS”) and wonder how this differs from the safeguarding process described above. Swipe International Limited is not a bank and the e-money services provided to you by Swipe International are not covered by the FSCS therefore, in the event of our insolvency, customers will not be eligible for protection under the FSCS. Certain authorised financial services firms (such as a UK authorised bank) do not have the same safeguarding obligations as firms such as Swipe International but instead are required to participate in the FSCS. The FSCS protects consumers together with some small businesses, limited companies and charities (that meet its eligibility criteria) should a bank fail and is unable to return your money to you. The FSCS acts like an insurance policy for bank accounts and pays out up to a maximum of £85,000 per eligible person, per bank, building society or credit union or up to £170,000 for joint accounts. Both the safeguarding regime and FSCS ultimately aim to ensure your funds are protected but do so in different ways. In the unlikely event of our safeguarding bank becoming insolvent, the FSCS may provide compensation for the amounts of safeguarded funds that we hold for you. This protection, where available, would be subject to the same compensation limits as if you held your money directly in the safeguarding bank. More information about using a non-bank payment service provider (such as Swipe International Limited) and the protections they offer can be found on the FCA's website at https://www.fca.org.uk/consumers/using-payment-service-providers.