Segregate and safeguard the funds held by your business

A safeguarding account is a special bank account, opened with a licensed credit institution, where funds collected by a financial intermediary on behalf of its clients are isolated. These funds are legally separated from the company's own funds: they cannot be seized by the intermediary's creditors in the event of a default.

This protection is based on the principle of legal segregation of funds: the clients of the payment institution remain the owners of their funds, regardless of the intermediary's financial situation. The safeguarding account is opened in the name of the payment institution, which is the sole account holder.

However, the Deposit Guarantee and Resolution Fund (FGDR) in France applies a specific mechanism to third-party funds: the guarantee (up to €100,000) is calculated at the level of each beneficiary, meaning each end client whose funds are deposited in this account. Each client thus benefits individually from FGDR protection, up to the amount of their claim, without the cap being shared among all the payment institution's clients (Article L.312-4-1 of the French Monetary and Financial Code). In practice, the safeguarding account is the guarantee that your clients' money remains your clients' money—even if your company experiences financial difficulties.

Yes, without exception in France. Payment institutions (PIs) and electronic money institutions (EMIs) have a legal obligation to safeguard their clients' funds with a licensed credit institution. This obligation is founded in European law under Directive (EU) 2015/2366, known as PSD2 (Articles 10 and 11), transposed into French law within the Monetary and Financial Code (Articles L.522-17 for PIs and L.526-32 for EMIs).

Safeguarding must take place no later than the business day following the receipt of funds—this is known as D+1 compliance. Failure to comply with this obligation exposes the company to sanctions by the ACPR, which can go as far as the withdrawal of its license.

Entities benefiting from a partial exemption from the ACPR (position P-2022-01, limited network of acceptors or limited range of goods and services) may, under strict volume and scope conditions, benefit from a safeguarding waiver—and not simply a relaxation of its terms. This waiver ceases to apply as soon as volume thresholds are crossed or the activity extends beyond the declared limited network of acceptors or limited range of goods and services, which requires continuous monitoring.

Only a credit institution licensed by the European Central Bank (ECB) or a national authority can legally open a safeguarding account. It is not a matter of the services offered; it is a strict regulatory requirement enshrined in the Monetary and Financial Code.

Payment institutions themselves—Swan, Stripe, Lemonway, Qonto—cannot host your safeguarding account, even if they offer you other payment services. They do not have credit institution status.

Memo Bank is a credit institution licensed by the ECB and supervised by the ACPR. As such, we are authorized to open and manage all the regulatory accounts you need: safeguarding accounts, settlement accounts, special purpose accounts (CAS), and dedicated liquidity accounts (CLA). In practice, this means a single point of contact for your compliance and your operations—without stacking up providers.

The D+1 rule requires that funds collected from your clients be transferred to your safeguarding account no later than the business day following their receipt. In practice, the slightest operational friction—a manual file transfer, a bank processing delay, a system outage—can put you in non-compliance.

The only way to ensure D+1 in a reliable and verifiable manner is through full automation via API. Specifically:

• As soon as a client payment is received, a webhook automatically triggers the movement to the safeguarding account.
• The transfer takes place in a few seconds, 24/7, without human intervention.
• Each movement is timestamped and traceable, allowing you to produce precise reporting in the event of an ACPR or Banque de France audit.

With the Memo Bank API, you configure this automation just once. It then executes with each transaction, regardless of volume—whether that's 100 or 100,000 operations per month.

These two accounts work in tandem, but they have distinct roles.

The Safeguarding Account

• Receives and protects the funds collected on behalf of your clients.
• Its balance represents the exact counterpart of the funds held on behalf of third parties.
• This account is unseizable by your creditors and is subject to strict rules of use: it can only be debited to execute your clients' payment instructions or to return their funds.

The Settlement Account

• Is the operational account.
• It is from this account that payment operations initiated by or intended for your clients are executed—outgoing transfers, refunds, payouts to merchants.

In the most common architecture, funds pass from the safeguarding account to the settlement account at the time the operation is executed. This organization is a good operational practice; other architectures exist, provided they comply with the segregation and traceability obligations imposed by regulations.

In summary: the safeguarding account stores and protects. The settlement account executes and releases. Both are necessary for a compliant flow architecture, and Memo Bank opens them simultaneously under a single account agreement.