How safe is the pound in your phone? Lessons from Wirecard

In June 2020, Wirecard AG, the substantial German fintech company, collapsed into insolvency. One consequence was that the payment processing services offered by its UK subsidiary were disrupted, exposing consumers (including vulnerable ones) to difficulties and delays in accessing their funds.

Richard Fowler considers how robust the regulation of payment processors and e-money institutions currently is in England and Wales and addresses possible reforms. He examines the FCA's new safeguarding guidance, identifying its strengths and weaknesses, and also asks what part the Financial Services Compensation Scheme and general insolvency law do (and should) play in protecting users of these services.

This article first appeared in the November 2020 issue of Butterworths Journal of International Banking and Financial Law, (2020) 10 JIBFL 676.