How Cash App Protects Your Money
Squareup Europe Limited (trading as “Cash App”), is an Electronic Money Institution (“EMI”) authorised by the Financial Conduct Authority (the “FCA”) under the Electronic Money Regulations 2011 (firm reference number 900846) for the issuance of electronic money and provision of payment services. Details of our authorisation are available on the public register https://register.fca.org.uk/.
Cash App is not a bank and, therefore, we do not hold customer funds as a deposit to use for our own purposes or to lend to third parties.
How do we protect your money?
In the UK, banks and building societies protect your money (up to certain limits) through a scheme known as the Financial Services Compensation Scheme (“FSCS”). EMIs (such as Cash App) are not part of the FSCS, instead we protect your money through a process known as ‘safeguarding’.
We want to make sure that the difference between safeguarding and the FSCS and ensure you are aware your funds are not protected by the FSCS.
Safeguarding is governed by strict legal and regulatory obligations and requires us to ensure your money is protected in the unlikely event Cash App goes out of business for any reason. This means that most, if not all, the money you hold in your Cash App account at the time of failure will be paid back to you.
As soon as you have deposited money into your Cash App account, your money is safeguarded in one of the following ways:
- your money is placed in a dedicated "safeguarding account" held with a credit institution (i.e. a bank), where these funds are held for your benefit; or
- Your money is invested in low risk assets that have been approved by the FCA; or
- your money is insured with an insurance provider which becomes payable in the event that Cash App is unable to meet its financial obligations.
Your money will continue to be safeguarded for as long as they are held by us. Once you withdraw your money from Cash App your money will no longer be safeguarded.
What does this all mean?
This means that if you are holding money with Cash App and the business was to fail (i.e. become insolvent or be unable to meet its financial obligations), your money is still protected from other creditors and steps will be taken to return all or most of your money back to you.
It may take some time to receive, and the reason it may not be the full amount is because some costs could be taken by the administrator or liquidator. An administrator or liquidator is the person that acts on behalf of a failed firm and will be responsible for winding up the company and distributing any money to customers.
What do you need to do?
No action is required from you. We simply want to ensure that you understand how we protect your money.
Want to know more?
If you would like to read more about non-bank payment providers like Cash App and what protections you have if you use our services, you can read the FCA guidance here. Similarly, you can find out more about safeguarding and how your money is protected on the FCA’s website here.
