For customers of Wise Payments Ltd, sending money via our Send Money product or holding money in the Wise account, we safeguard it in keeping with Wise’s regulatory obligations in the UK. We do this by holding a mix of cash in banks, investments in secure liquid assets (mainly government bonds) and a comparable guarantee. We also keep your money separate from the money we use to run our business. For more information on how other Wise entities safeguards funds see here.
Wise Payments Ltd is not a bank, which means we do not lend out our customers’ money to people or businesses. This also means the e-money and payment services provided to you by Wise Payments Ltd are not subject to the Financial Services Compensation Scheme (FSCS).
If you have opted to invest any of your Wise Account balance in Assets with our UK investments company, Wise Assets UK Ltd, this information does not apply to your invested balance. You can learn more about how your money is held in Assets and applicable FSCS coverage here. If you are interested to hear more about the Assets feature, see here.
Here’s an overview of where Wise Payments Ltd predominantly safeguards
| Type | Institution |
|---|---|
| Cash Deposit & Secure Liquid Assets | BARCLAYS BANK PLC |
| Cash Deposit | CITIBANK N.A. |
| Cash Deposit | JPMORGAN CHASE BANK, N.A |
| Cash Deposit | DEUTSCHE BANK AG, LONDON |
| Cash Deposit | HAMBURG COMMERCIAL BANK |
| Cash Deposit | BANK OF AMERICA |
Money is held in cash with these banks, as secure liquid assets like EU, UK and US Government bonds or backed by a comparable guarantee given by authorised insurers. We use a combination of these methods to protect our customers in the event Wise becomes insolvent to diversify our risks and maximise liquidity. We do this to make sure your money is available to you.
Why we hold some customer money in secure liquid assets like EU, UK and US Government bonds
Holding money in government assets is generally less risky than holding your money in a bank account, because banks can become insolvent but stable governments rarely do. For a government bond to fail, the government which issued the bond would need to default on their loan payments, which almost never happens with large stable governments.
Customer money is held in cash or bonds with a term of less than 3 years. The average duration of the bonds we hold is currently around 6 months. This makes us generally more resilient in the face of interest rate changes. We actively manage the fair value risk in relation to these bonds and any impact is already reflected in our financial position.
We hold your money in shorter-term bonds because bonds with a longer-term can lose value if interest rates go up and they need to be sold early. These bonds can be sold if additional liquidity is required, but with available cash holdings at banks, this is generally not expected.
How we keep your money available to you even during market turmoil
In order to mitigate against our banking partners’ risk, we safeguard a significant percentage of funds in government bonds, or use a comparable guarantee, as set out above, which would not be impacted by bank failures. However, we need to hold some of the funds in banks in order to provide readily available liquidity, but this is diversified amongst several large, highly rated banks. These are listed above.
We keep our holdings under regular review to ensure the safety and availability of customer funds.
What if I hold Assets with Wise?
We offer our Assets feature, which is an investment service and includes Stocks and Interest, to customers based in the UK. Money invested in Assets is held in segregated accounts, separate from Wise’s own funds. In addition to this protection, each customer is also eligible for protection under the FSCS up to a value of 85,000 GBP in the UK.
Learn more about how your money is held when you use Assets
Who regulates Wise?
In the UK, Wise Payments Limited is an authorised Electronic Money (e-money) Institution under the Electronic Money Regulations 2011 with permission to issue electronic money and provide payment services. Wise Assets UK Ltd is regulated under the Financial Services and Markets Act 2000 for the provision of investment services.
We follow a strict set of rules set by our regulators in each country in which we operate, such as the Financial Conduct Authority (FCA) in the UK, the National Bank of Belgium (NBB) in Europe and 48 state regulators in the USA. These regulators protect the markets in which we operate.