No, Monese does not hold a traditional banking licence. It operates as an Electronic Money Institution (EMI).
While Monese offers many services that may feel similar to those provided by a bank, its regulatory status and operational model are distinct.
Understanding Monese's Operational Model
Monese's e-money accounts are provided by Prepay Technologies Ltd (PPT). This entity is an electronic money institution, authorised and regulated by the Financial Conduct Authority (FCA) under the Electronic Money Regulations 2011 (FRN 900010) for the issuance of electronic money. This specific authorisation allows Monese to issue electronic money and facilitate various payment services.
Key Differences: Banking Licence vs. E-Money Licence
It's crucial to understand the distinction between a banking licence and an e-money licence, as they involve different regulatory frameworks and levels of consumer protection.
| Feature | Banking Licence (Traditional Bank) | E-Money Licence (Monese/EMI) |
|---|---|---|
| Primary Function | Accepts deposits, offers loans, provides a full range of financial products. | Issues electronic money, facilitates payments, manages e-money accounts. |
| Regulation | Regulated by prudential authorities (e.g., PRA in the UK) for financial stability and systemic risk. | Regulated by the FCA (in the UK) for e-money issuance and payment services. |
| Fund Protection | Funds are typically protected by deposit guarantee schemes, such as the Financial Services Compensation Scheme (FSCS) in the UK (up to £85,000 per eligible person). | Customer funds are safeguarded; they are not covered by deposit guarantee schemes. |
| Lending Activity | Can lend money to customers. | Generally cannot lend money; focuses on payment and e-money services. |
How Monese Protects Customer Funds
Since Monese, through Prepay Technologies Ltd, does not hold a banking licence, customer funds held in Monese accounts are not protected by the Financial Services Compensation Scheme (FSCS). Instead, EMIs like Monese are required to adhere to safeguarding requirements.
This means:
- Customer funds are kept separate from Monese's operational funds in segregated bank accounts.
- These funds are either held with reputable credit institutions or covered by an insurance policy or guarantee.
- In the unlikely event of insolvency of Prepay Technologies Ltd, these safeguarded funds are protected from creditors and would be returned to customers, as they are not considered company assets. You can learn more about Electronic Money Institutions and their regulations on the Financial Conduct Authority's website.
Monese's Services and Offerings
Despite not being a bank, Monese provides a broad array of financial management tools and services designed to meet modern banking needs. These include:
- Multi-currency accounts: Allowing users to manage money in various currencies.
- International money transfers: Facilitating transfers across borders, often at competitive rates.
- Budgeting tools: Features to track spending, set budgets, and gain financial insights.
- Payment solutions: Integration with popular payment methods and debit cards for everyday use.
- Digital-first experience: Catering to users seeking convenient, app-based financial services.
Monese serves a diverse user base, including digital natives, freelancers, and those who may face challenges accessing traditional banking services.
