Safeguarding Definition.
Requirement for payment institutions and e-money institutions to protect customer funds, either by depositing them in a segregated account at a credit institution or by covering them with a guarantee or insurance policy. Safeguarded funds are out of reach of the institution’s creditors if it fails. It is the mechanism that protects the funds marketplaces and PSPs collect on behalf of third parties.
See also
Where this term appears
GuideThe role of banksGuideMerchant, acquirer, PSPGuideAgents, distributors, and banking-as-a-service: who is liable for whatGuidePayments in the Baltics and FinlandGuideProtecting customer funds, and what happens when the institution failsGuidePayments in IrelandGuideLuxembourg and Europe’s licensing hubsGuideResponding to authorities: requisitions, garnishments, and foreign requestsGuidePayments in the UKGuideCollecting payments in China and repatriating the fundsGuidePayments in South KoreaGuidePayments in India