How does Airwallex keep my money safe

Airwallex is committed to keeping customer funds safe. Airwallex is regulated and licensed in jurisdictions where it needs licenses to operate. Airwallex services are provided in compliance with applicable laws and regulations. How Airwallex protects its customer funds depends on the regulatory requirements of the jurisdictions where the relevant Airwallex entity is licensed to operate. 

The Netherlands

In the Netherlands, Airwallex’s operating company, Airwallex (Netherlands) B.V.  (‘Airwallex NL ’) holds an Electronic Money Institution license issued by the Dutch Central Bank (De Nederlandsche Bank). As an e-money institution, Airwallex NL must implement customer funds safeguarding procedures and measures that comply with rules set by De Nederlandsche Bank (“NL Rules”). Airwallex NL therefore has implemented ‘safeguarding’ procedures and measures in compliance with NL Rules to protect its customers' funds.

The goal of safeguarding customer funds is to ensure that customer funds are kept in a designated safeguarding bank account (“NL Safeguarding Account”) and separated  from Airwallex NL’s own funds that it uses for its business operations. Customer funds are protected from the moment Airwallex NL receives the funds, until the moment our customers make payout or request a redemption (withdrawal) from their account with Airwallex NL (“NL Wallet”). This means that the money that our customers receive into their NL Wallet is fully backed by money that we hold in the NL Safeguarding Account. 

Moreover, the NL Safeguarding Accounts are held by an independent custodian entity called Airwallex Netherlands Foundation (the “NL Foundation”), which is a customer accounts foundation (stichting derdengelden) set up and managed in accordance with Dutch law. The NL Foundation is a separate legal entity, independent from Airwallex NL. This separation and independence provides additional protection should Airwallex NL become insolvent. In the unlikely event of insolvency, the funds in the NL Safeguarding Account can only be used to pay customer funds back to our customers at their request. The funds are not available to any of Airwallex’s creditors, our banks or third parties. It means that whenever customers ask us to redeem (withdraw) their e-money or make a payout, that money will be available. 

You may have heard of the Deposit Guarantee Scheme (depositogarantiestelsel, “DGS”)  and wonder how this differs from the safeguarding process described above. Certain authorised financial services firms (such as an authorised bank) do not have the same safeguarding obligations as firms such as Airwallex NL, but instead are required to participate in the DGS.  The DGS protects consumers together with some businesses (that meet its eligibility criteria) should a bank fail and they cannot return your money to you. The DGS acts like an insurance policy for bank accounts and pays out up to a maximum of EUR 100,000 per eligible person, per bank. Both the safeguarding regime and DGS ultimately aim to ensure customer funds are protected but do so in different ways. For the avoidance of doubt , Electronic Money Institutions like Airwallex NL do not participate in the DGS.

United Kingdom

In the United Kingdom, Airwallex’s operating company, Airwallex (UK) Limited (‘Airwallex UK’)  holds an Electronic Money Institution (EMI) license issued by the Financial Conduct Authority. EMIs must implement customer funds safeguarding procedures and measures that comply with rules set by the Financial Conduct Authority. As part of our EMI licence, we have put in place ‘safeguarding’ measures to protect all of our customers' funds in line with these rules.

The purpose of safeguarding is to ensure that customer funds are kept separate from Airwallex UK’s own funds that it uses for its business operations and are protected from the moment Airwallex UK receives the funds, until our customers make payout or request a redemption (withdrawal) of their balance. This means that the money that our customers receive into their Wallet, is fully backed by money that we hold in separate bank accounts. The separately held money is only available for the purposes of giving our customers back their money on their request. In addition, this separately held money is not available to any of Airwallex’s creditors, our banks or third parties. It means that whenever our customers ask us to redeem (withdraw) their e-money or make a payout, that money will be available. 

In the unlikely event of Airwallex UK ceasing business operations or going into insolvency, liquidation or bankruptcy, our customers’ funds kept with us will be safely set aside in the safeguarding account, and they receive them back in priority to all our other creditors.  Please do note that the appointed insolvency practitioner who would be distributing our customers’ funds back to them, may charge a standard fee by deducting from the balance of customers’ accounts prior to returning the funds. This fee is not charged by Airwallex UK.

You may have heard of the Financial Services Compensation Scheme (“FSCS”) and wonder how this differs from the safeguarding process described above. Certain authorised financial services firms (such as a UK authorised bank) do not have the same safeguarding obligations as firms such as Airwallex UK, but instead are required to participate in the FSCS.  The FSCS protects consumers together with some small businesses, limited companies and charities (that meet its eligibility criteria) should a bank fail and they cannot return your money to you. The FSCS acts like an insurance policy for bank accounts and pays out up to a maximum of £85,000 per eligible person, per bank, building society or credit union or up to £170,000 for joint accounts. Both the safeguarding regime and FSCS ultimately aim to ensure your funds are protected but do so in different ways. As Airwallex UK is not a bank and is not covered by the FSCS, in the event of our insolvency, customers will not be eligible for the protection under the FSCS.

More information about using a non-bank payment service provider (such as Airwallex) and the protections they offer can be found on the FCA’s website at https://www.fca.org.uk/consumers/using-payment-service-providers.

Australia

In Australia, Airwallex Pty. Ltd. (‘Airwallex AU’) is regulated by the Australian Securities and Investments Commission (ASIC) under an Australian Financial Services Licence (AFSL - license number 487221).

When customers deposit funds into an Airwallex business account, the entire amount of those funds are guaranteed by an Australian authorised-deposit taking institution (ADI), with the benefit of that guarantee held by an independent third party trustee on trust for the customers of Airwallex AU. In the unlikely event of Airwallex going into insolvency, liquidation or bankruptcy, customers will have a valid claim to receive their funds back by contacting our independent trustee. The details of our independent trustee can be found here.

Airwallex Capital Pty Ltd (Airwallex Capital) is regulated by ASIC with Corporate Authorised Representative (CAR) number 001304702 of AFSL number 502758. Airwallex Capital is the investment manager of the Airwallex Yield Liquidity Fund. When customers invest in Yield, all customer funds are held safely in trust by K2, our Trustee. Our Trustee has a fiduciary duty to customers to segregate their funds from Airwallex Yield’s operational funds. Client funds are invested in low-risk assets through our partner, JP Morgan.

New Zealand

In New Zealand, Airwallex’s operating company, Airwallex (New Zealand) Limited (‘Airwallex NZ’) is registered as a Financial Service Provider (FSP) with the New Zealand Companies Office.

Airwallex NZ has elected to hold the funds it receives from customers on trust in one or more accounts we hold with a bank (each a ‘Segregated Account’). Under this Segregated Account structure, customer funds are held separately from Airwallex NZ’s own funds, and the customers remain the beneficial owners of their funds. This means that whenever our customers ask us to redeem (withdraw) their money or make a payout, that money will be available. 

In the unlikely event of Airwallex NZ going into insolvency, liquidation or bankruptcy, our customers’ funds kept with us will be safely set aside in the safeguarding account, and they receive them back in priority to all our other creditors.

United States

FDIC-Insured Partner Bank Accounts

Although Airwallex is not itself a bank, we partner with banks worldwide to offer our services.  In the U.S., these banking partnerships are designed to provide our customers’ funds with Federal Deposit Insurance Corporation (FDIC) insurance coverage of up to $250,000 per qualified customer account, per banking institution, to protect our customer’s funds if a bank fails.  The FDIC insurance coverage eligibility applies as soon as customer funds are deposited in U.S. partner bank accounts.

Evolve Bank & Trust, member FDIC, provides payments services to certain U.S.-based customers as an Airwallex partner bank. This partnership with Evolve gives Airwallex customers the ability to collect funds both domestically, in U.S. Dollars, and from abroad, in multiple currency denominations. At Evolve, our customers’ funds are held in an FDIC-insurance-eligible omnibus account for the benefit of (or FBO) Airwallex’s customers.  Evolve has committed to ensure that the funds in our customers’ account remain eligible for FDIC “pass-through” insurance to the extent permitted by applicable law.  Evolve is not permitted to commingle other funds with Airwallex customer funds. 

Airwalllex has no ownership interest in, access to, or control over the funds in these customer bank accounts.  The money is not available for Airwallex’s operational needs, and it is not available to Airwallex’s creditors or to other third parties.  In the unlikely event of Airwallex’ business failure, Airwallex would cooperate with regulators so that customers would have access to their assets in a timely fashion.

Money Transmitter Licenses

Businesses like Airwallex that collect customer funds and transmit them to third parties must generally obtain money transmitter licenses (MTLs) from the states in which they do business.  Airwallex currently holds MTLs in 40 states.  State laws protect Airwallex customers doing business under these MTLs in several ways.  

Surety Bonds 

Most states require licensed money transmitters like Airwallex to purchase surety bonds. Surety bonds protect customers by discouraging the money transmitter from violating industry standards and laws.  Surety bonds also guarantee the availability of a specified amount of compensation for customers if certain conduct by a money transmitter results in monetary loss. For example, if a money transmitter violates applicable laws, the funds in the surety bond may be available to compensate customers for their resulting losses.  After compensation payments are made from the surety bond, the money transmitter is generally required to replenish the surety bond in order to maintain its license.

Minimum Capital Requirements

States also require MTL-holders to maintain a minimum amount of capital.  These capital requirements discourage MTL-holders from taking excessive financial risks that could lead to the money transmitter’s business failure. They also encourage the money transmitter to maintain liquidity sufficient to absorb unexpected losses.  

Permissible Investments Maintenance Requirements

Most state money transmitter laws include permissible investments maintenance requirements. In general, MTL-holders must maintain a reserve of assets with a minimum market value that is equal to or greater than the aggregate value of all of the MTL-holder’s current payment obligations.  The reserved assets, a.k.a permissible investments, typically include cash, certificates of deposit, treasury securities, and other lower-risk investments. This MTL requirement protects customers because, in the event of an MTL-holder’s insolvency, the MTL-holder should have a reserve of cash (or investments easily convertible into cash) on hand in an amount sufficient to return all funds owed to the MTL-holders’ customers.    

Canada

In Canada, Airwallex (Canada) International Payments Limited (‘Airwallex CAN’), is registered as a Money Services Business with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and is licensed as a Money Services Business (MSB) with Revenu Quebec.

To keep our customers’ funds safe, Airwallex CAN has implemented commercially reasonable administrative and technical measures to protect the funds collected for or received from customers in connection with our services.

Funds collected by Airwallex CAN from customers are deposited in a bank account in Canada. Unless otherwise required by law, Airwallex CAN transfers or converts customer funds solely based on our customers’ authorized instructions. On a daily basis, Airwallex CAN reconciles customers' payment instructions to ensure all instructions are being properly processed by our partners, and our internal ledger system will auto calculate the customers’ account balance based upon processed transactions.

Malaysia

In Malaysia, Airwallex’s operating company, Airwallex (Malaysia) Sdn Bhd (‘Airwallex MY’) is regulated by the Bank Negara Malaysia (Central Bank) under the Money Service Business Class B License.

To keep our customers’ funds safe, Airwallex MY has implemented commercially reasonable administrative and technical measures to protect the funds collected for or received from our customers in connection with our services.

Airwallex MY deposits all funds collected for or received from our customers in a designated account at a licensed bank in Malaysia. Malaysia’s Money Services Business Act 2011 also sets a range of restrictions on Airwallex MY’s withdrawal or utilisation of the funds in this account. Additionally, the funds in this account are not subject to any attachment, sequestration, or levy upon, for or in respect of any debt of Airwallex MY or any claim whatsoever against Airwallex MY. 

In the unlikely event of Airwallex MY going into insolvency, liquidation or bankruptcy, the funds in this account are not deemed to form part of Airwallex MY’s property.

Singapore 

In Singapore, Airwallex’s operating company, Airwallex (Singapore) Pte. Ltd. (‘Airwallex SG’), is licensed as a Major Payment Institution and is regulated by the Monetary Authority of Singapore (MAS). Under Singapore law, a Major Payment Institution must have ‘safeguarding’ measures in place to protect all of our customers' funds in line with rules set by MAS.

How does Airwallex keep customer funds safe?

The purpose of safeguarding is to ensure that our customers’ funds are kept separate from Airwallex SG’s own funds that it uses for its business operations and are protected from the moment Airwallex SG receives the funds, until our customers make payout or request a redemption (withdrawal) of their balance. 

The funds our customers deposit into an Airwallex business account are held in a client segregated trust account, a ring fenced account that ensures funds are held in trust on our customers’ behalf. This separately held money is not available to Airwallex SG’s creditors, our banks or third parties. That means that whenever our customers wish to withdraw money or make a payout from their Airwallex account, that money will be available to them. 

In the unlikely event of Airwallex SG ceasing business operations or going into insolvency, liquidation or bankruptcy, our customers’ funds will be safely set aside in the safeguarding account, and they will receive them back in priority to all our other creditors.

Why it’s good to diversify

When you deposit money in a bank in Singapore, the Singapore Deposit Insurance Corporation (SDIC) insures your deposit up to S$75,000. This means customers that hold deposits above S$75,000 with a single bank are left exposed if the bank fails. Whilst it is rare for a bank to fail, recent events are a stark reminder of the importance of managing risk exposure. Any individual or business that has more than S$75,000 in a single bank should consider spreading their cash reserves across more than one financial institution to ensure their funds are protected. Furthermore, foreign currency deposits are not covered by SDIC.

Safeguarding is different to the protection afforded under the SDIC. The key difference between the SDIC and safeguarding is that SDIC protection is provided by a separate organisation (rather than the bank itself) and in the event of the bank’s insolvency the organisation pays customers up to the maximum compensation amount. Whereas when our customers deposit money in an Airwallex business account, our customers can rest assured that their funds are safeguarded (less certain administrative charges), with no upward limit on the amount. If you’re looking to reduce your risk exposure, an Airwallex business account can offer you the ability to secure funds in excess of SDIC regulation. It’s one of many reasons thousands of businesses choose to hold money with us.

Hong Kong

In Hong Kong, Airwallex’s operating company, Airwallex (Hong Kong) Limited (‘Airwallex HK’), is licensed as a Money Service Operator (MSO) and is regulated by the Customs & Excise Department. We partner with banks worldwide to provide cross-border money transfers, foreign exchange, payment acceptance and card issuing through our multi-currency accounts to empower our customers’ global businesses. 

How are customer funds kept safe?

To keep our customers’ funds safe, Airwallex HK has implemented commercially reasonable administrative and technical measures to protect the funds collected for or received from customers in connection with our services. 

Airwallex HK deposits all funds collected for or received from our customers in designated bank accounts. Unless otherwise required by law, Airwallex HK transfers/converts customer funds solely based on our customer’s instruction. On a daily basis, Airwallex HK reconciles customers' payment instructions to ensure all instructions are being properly processed by internal system/banking partners and our internal ledger system will auto calculate the customers’ account balance based upon processed transactions. 

In the unlikely event of Airwallex going into insolvency, liquidation or bankruptcy, Airwallex would cooperate with regulators so that customers would have access to their funds in a timely manner, to the extent permitted by law.

In order to best manage risk, we partner with multiple banks around the world to provide these financial services to customers. Our banking partners are all reputable banks like DBS, JP Morgan, Standard Chartered, ANZ, and more. If you’re looking to reduce your risk exposure, an Airwallex business account can offer you the ability to spread funds across our 60+ different banking partners. It’s one of many reasons thousands of businesses choose us.

We are available to discuss this further if you have any questions or if you would like to find out more please contact our Support Team here

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