How Zeller UK Works: Regulation, Safeguarding, and Fund Protection

What is an EMI company?

An EMI, or Electronic Money Institution, is a financial service provider authorized to issue digital money and provide payment services to their customers.

Zeller UK is authorised and regulated by the Financial Conduct Authority to operate in the United Kingdom under an EMI licence.

How does Zeller UK issue E-Money?

When you select to direct your settlements to your Zeller Transaction Account, we deposit those funds into a Safeguarded Account where they are protected. In exchange for those funds, we issue E-money to your ZTA.

When you make a payment via bank transfer or use your Zeller Business Debit Card, we use the funds held for you in our Safeguarded account to fund your transaction.

How are my funds protected?

As a licenced EMI, Zeller is required by the FCA to Safeguard client funds, either by ensuring that those funds are placed in a separate account from the institution’s working capital and other funds, or are covered by an appropriate insurance policy.

Zeller UK holds merchant funds in Safeguarding Accounts: bank accounts specifically designed to hold client funds, and as such, their balances can only be used to fund customer-initiated transactions and cannot hold Zeller UK’s own money.

In the event of Zeller UK’s insolvency, the funds held in the Safeguarding Accounts must be returned to each Merchant.

Is Zeller protected by FSCS?

FSCS stands for Financial Services Compensation Scheme, and it’s the UK’s official safety net for customers of authorised financial firms.

If a bank, building society, insurer, or investment firm fails, the FSCS may pay compensation to protect customers so they don’t lose all their money.

As an EMI, Zeller UK is not covered under the FSCS, instead, your funds held by Zeller UK are protected under the UK Safeguarding Regulations. See: How are my funds protected?

Is Zeller regulated by the FCA?

Yes, Zeller UK is licensed by the Financial Conduct Authority to operate in the UK as an Electronic Money Institution.

As such, Zeller UK operates under the following regulations:

The Payment Services Regulations (PSR 2017)
The Electronic Money Regulations (EMR 2011)
The Consumer Duty

Zeller UK is also required to undergo a safeguarding audit at least annually, the report from which is sent to the FCA for review.

Is Zeller a bank?

No, Zeller UK is not a bank as we do not hold a banking licence in the UK. Zeller UK is a licensed Electronic Money Institution.

Here are a few key differences between a bank and an EMI:

Banks are authorised as a bank (deposit-taker) and regulated by the Prudential Regulation Authority (PRA) as well as the Financial Conduct Authority (FCA).

They are allowed to accept deposits and lend money, are covered by FSCS, and can use deposits to make loans and invest

EMIs are authorised as an Electronic Money Institution and regulated only by the Financial Conduct Authority.

They are allowed to issue only electronic money, not take deposits. They cannot lend customer funds (except in very limited ways). Client funds are not protected under the FSCS, instead client money must be safeguarded (segregated) and cannot be used for lending or investments.

Both can offer

Current accounts
Debit cards
Payments (UK & international)
Mobile apps