• Introduction: the changing regulatory landscape
• What is a safeguarding account?
• Why the new ECB Regulation is critical for EMIs and PIs
• Magnetiq Bank safeguarding solution: tailored for FinTech
  • Compliance
  • Multi-Currency Processing & FX Transactions
  • SEPA, SEPA Instant, and TARGET Payment Solutions
  • Operational Accounts and Payment Acceptance
  • Advanced API Integration
• ECB’s Policy: a challenge for EMIs and PIs
• Why choose Magnetiq Bank?
• Preparing for April 2025: act now
• Conclusion: stay ahead with a secure safeguarding solution
• Ready to Get Started?

Introduction: the changing regulatory landscape

The FinTech industry is evolving, and regulatory requirements are becoming more stringent. As of April 2025, the European Central Bank (ECB) will no longer allow Electronic Money Institutions (EMIs) and Payment Institutions (PIs) to safeguard their clients’ funds with National Central Banks. This shift means that all non-bank Payment Service Providers (PSPs) must safeguard their funds with commercial banks, making finding a reliable and compliant partner critical.

What is a safeguarding account?

A safeguarding account is a financial account that keeps client funds separate from the institution’s operational funds, ensuring protection in financial instability or insolvency. This legal requirement helps maintain customer trust and regulatory compliance. For FinTech companies, particularly EMIs and PIs, safeguarding accounts is essential for protecting their customers’ money and meeting European Union and ECB guidelines.

Why the new ECB Regulation is critical for EMIs and PIs

With the new regulations, EMIs and PIs can no longer rely on national central banks for safeguarding, which will require a significant shift in operations. The ECB’s new mandate promotes competition and efficiency in the retail payments. Still, it also pressures FinTech companies to secure safeguarding solutions with commercial banks.

Failing to act in time could lead to non-compliance, potential disruptions in business operations, and loss of client trust. Therefore, finding a safeguarding partner is an urgent need for every FinTech.

Magnetiq Bank safeguarding solution: tailored for FinTech

At Magnetiq Bank, we’ve been offering specialized services for FinTech companies for years, and we are well-prepared to support EMIs and PIs in this transition.

• Compliance. Our safeguarding accounts fully comply with the upcoming ECB regulations, ensuring your business can continue operating seamlessly.
• Multi-Currency Processing & FX Transactions. We offer access to over 100 currencies, enabling smooth international transactions and efficient foreign exchange (FX) operations.
• SEPA, SEPA Instant, and TARGET Payment Solutions. Our solutions provide optimized euro transactions with SEPA and TARGET systems, ensuring quick, reliable, and cost-effective payments across Europe.
• Operational Accounts and Payment Acceptance. Operational accounts allow you to manage your business expenses and cash flow. We also support Visa, Mastercard, Apple Pay, and Google Pay, giving you a wide range of payment acceptance options to grow your customer base.
• Advanced API Integration. Our Banking-as-a-Service (BaaS) platform offers API integration that automates financial workflows, helping you manage your operations efficiently while staying compliant.

ECB’s Policy: a challenge for EMIs and PIs

The recent ECB regulations make the job of EMIs and PIs more challenging. The July 2024 document[1] addressing segregated account holding and the amendments to Directive (EU) 2015/2366[2] clearly states that, based on historical transaction data, EMIs and PIs can only hold as much client money at central banks as is necessary to cover payments. Any excess must be held with a commercial bank.

This has raised concerns, as many EMIs and PIs feel they are being treated differently from other financial institutions. The ECB justifies its stance by emphasizing the need to maintain financial stability, which applies to all, including central banks, credit institutions, and non-bank PSPs like EMIs and PIs. The reality is that central banks are more suited to working with large credit institutions rather than numerous smaller FinTech entities.

However, not all hope is lost. While the ECB acknowledges the difficulty EMIs and PIs have faced with retail banks, it is worth noting that banks like Magnetiq Bank, which specialize in servicing payment service providers, have long offered segregated accounts for client funds. At Magnetiq Bank, we have been refining our segregated accounts for over a decade, adhering to the demands of central banks in different jurisdictions.

We even offer solutions where client funds held in segregated accounts are stored separately at Latvijas Banka, earning “overnight” interest. This reduces the risk to EMIs and PIs while generating additional income. We are also developing a segregated holding structure on our balance sheet, which would offer zero risk of losing client funds—practically identical to the service previously available only at the Bank of Lithuania. As a result, we are prepared to offer FinTech the solutions they need to navigate the ECB’s regulations while staying competitive.

Why choose Magnetiq Bank?

Magnetiq Bank has been a leading banking partner for FinTech companies for years. Here’s why EMIs and PIs should choose us:

• Proven track record. We specialize in providing banking solutions for FinTech businesses.
• Regulatory expertise. We have in-depth knowledge of ECB and EU regulations, ensuring your business remains compliant.
• Comprehensive solutions. Our services cover all your business needs, from safeguarding accounts to FX and payment processing.

Preparing for April 2025: act now

The ECB’s deadline is approaching fast, and it’s essential to secure your safeguarding solution ahead of time. By choosing Magnetiq Bank, you ensure compliance and access to a range of services designed to support your growth and streamline your operations.

Don’t wait until the last minute—this transition is too important to risk delays. Contact Magnetiq Bank today to learn how we can support your business through this regulatory change.

Conclusion: stay ahead with a secure safeguarding solution

The FinTech landscape is changing, and regulatory compliance is no longer an option—it’s a necessity. The upcoming ECB regulations mean that EMIs and PIs must act now to secure safeguarding solutions that will protect their client’s funds and keep their businesses running smoothly.

At Magnetiq Bank, we understand FinTech companies’ unique challenges and are here to help you meet those challenges head-on. With our full suite of services, from safeguarding accounts to payment processing and FX transactions, you’ll be ready for future changes.

Ready to Get Started?

Please get in touch with us today to secure your safeguarding solution and explore how we can help your FinTech business thrive.

[1] European Central Bank. Policy on access by non-bank payment service providers to central bank-operated payment systems and central bank accounts. Available at: https://www.ecb.europa.eu/paym/target/target-professional-use-documents-links/tips/shared/pdf/Eurosys_pol_on_access_to_central_bank_operated_payment_systems_by_NBPSPs.pdf

[2] European Union. REGULATION (EU) 2024/886 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL. Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32024R0886