hen the Financial Conduct Authority ordered the UK arm of payments firm Wirecard to freeze customer funds, hundreds of thousands of people who had probably never even heard of the company suddenly found they could not access their cash. Customers of several UK banking and payment services, including FairFX, Pockit, U Account and Anna Money, were told that their money was caught up in the regulator’s action against the firm, leaving some unable to buy food or pay bills. Normal service was resumed on Tuesday but the events of last weekend have thrown a spotlight on the financial technology sector, which includes a number of major players offering bank-style products such as Revolut, Curve and gohenry. Many of these usually smartphone-based services are aimed at the millions of people who the traditional banks either do not want or struggle to cater for, such as those with a poor credit history or who have just arrived in the UK. Most of the players offering such bank-style accounts are not actually banks – typically they are e-money institutions, which are not covered by the UK Financial Services Compensation Scheme (FSCS). This puts them into a different category to companies such as Monzo, Starling, Tandem and Atom, which are all fully-fledged banks offering FSCS protection up to £85,000. There are lots of UK firms in this market that do not use Wirecard and were therefore unaffected. However, some of them piggyback on other third-party companies, which often provide their accounts or payment cards for them. Revolut What is it? Launched in 2015, it claims to have 3 million UK customers, and more than 12 million globally. It offers a bank-style account with a debit card, plus various other services, and is popular with people who frequently spend and send money abroad. It says the majority of its customers are serviced via Revolut Ltd, an authorised e-money institution based in London. What does it offer? There are three plans available. The standard option has no monthly subscription and lets you withdraw up to £200 a month from ATMs before fees are applied. You can also spend abroad in more than 150 currencies at the interbank exchange rate. Then there are the Premium and Metal plans at £6.99 and £12.99 a month respectively. These offer higher limits on withdrawals and other services including some travel cover and accounts for kids. How is people’s money protected? In terms of the UK, it says customer funds are securely held in ringfenced accounts with “a tier one UK bank”. Revolut said in December that it intended to acquire a UK banking licence in the future. If and when that does happen, it would be covered by the FSCS. Curve What is it? A service allowing people to spend from any of their accounts using only one card. You add your eligible Mastercard or Visa debit and credit cards to the Curve app and then spend using your Curve card. Launched in 2015, Curve says it has 1.3 million customers across Europe. It was one of the companies caught up in the Wirecard incident. Curve’s cards were suspended for two or three days because it relied on Wirecard for its financial transactions – but it was already well on the way to migrating to its own systems and this process was completed a few days ago. Curve cards and e-money are now issued by Curve OS, an authorised e-money institution based in London. What does it offer? There are three plans available. Curve Blue has no monthly subscription and comes with some perks, including an introductory cashback offer and some fee-free foreign ATM withdrawals, and there are also £9.99 a month and £14.99 a month options with extra benefits, including travel insurance. There is no money stored in your Curve account, so it is not a pre-paid card. You select the account you would like to pay with by tapping the related payment card in the app. How is people’s money protected? Curve says: “We have a safeguarding account that means there is a pot of money separate from the company’s money, should anything happen to us as a business.” Monese What is it? Launched in 2015 and initially targeting “unbanked, expat and immigrant consumers”, it claims to have more than 2.5 million people signed up in the UK and across Europe. It offers a bank-style account that comes with a debit card. Monese says it is a registered agent of PrePay Technologies, a London-based authorised e-money institution. (For EU customers, it is a different e-money institution: a Belgian company called PPS EU SA, authorised by the National Bank of Belgium.) What does it offer? There are three plans available. Simple has no monthly subscription (you pay £4.95 for your card to be delivered) and lets you withdraw up to £200 a month from ATMs before fees are applied. Plus, there is £2,000 a month of “free” foreign currency card spending. There is also a Classic option for £5.95 a month and a Premium one for £14.95 a month. How is people’s money protected? Monese told us it has to keep all customer money separate to its own company finances. “This guarantees that even in the unlikely event that Monese is no longer in business, all of our customers would receive 100% of their balance back.” gohenry What is it? A prepaid card and app with parental controls for young people aged six to 18. It counts as an e-money product. Founded by a group of parents in 2012, gohenry boasts more than 900,000 customers in the UK (it also operates in the US). It works with two companies that help provide its services. Its cards are issued by IDT Financial Services, a Gibraltar-based bank regulated in the territory. It also works with Adyen, a Dutch-based payments firm that obtained a European banking licence in 2017 and whose customers include Facebook and Uber. What does it offer? It is a pre-paid card that lets children spend money with retailers where they cannot pay cash. Parents can top up their child’s card and set spending rules, so they stay in control. They can decide where the card can be used – in shops, online or at cash machines – and are notified when and where their child is spending. It costs £2.99 a child each month, although you can join free for one month. How is people’s money protected? It says customers’ money is ringfenced and held in a secure NatWest account. It told us: “Should IDT Financial Services go out of business, both Visa and the regulator [in Gibraltar] would step in to protect customer funds and ensure they are returned to customers.” Cashplus What is it? Set up in 2005, it offers personal and business current accounts, and says that since launch it has had more than 1.6 million customers. Its personal account offers a debit card. What does it offer? It claims to be “like a bank account, just better” and offers things such as payment alerts, where you are notified if a direct debit is due and you do not have enough cash ready to pay it, and a Creditbuilder plan that helps you build up your credit score when you pay the monthly fee. You can pay cash in at any post office. There are three pricing plans where the monthly fee varies from zero to £9.95. Everyone pays a £5.95 card issue fee. The option with no monthly fee, Flexiplus, has charges for various things, such as 99p for each UK purchase and direct debit, and £2 for UK ATM withdrawals. How is people’s money protected? It is an authorised e-money institution with an e-money licence, although it says it is in the final stages of applying to become a bank, at which point it would be covered by the FSCS. It says customers’ money is held in a safeguarded bank account held by a major UK bank. Thinkmoney What is it? A digital banking service that went live in 2001 and offers a current account with a debit card, plus loan options. It says it has “helped thousands of people pay their bills on time, avoid late payment charges and improve their credit score”. It is an authorised e-money institution. What does it offer? With this account, money for regular payments is held separately so they are paid on time and any cash not needed for bills is then available to spend. It promises no fees if it refuses a payment because of a lack of funds – for example, if a direct debit bounces. However, its standard monthly fee is £10. How is people’s money protected? It says customers’ cash is held in a separate safeguarded Royal Bank of Scotland account. It adds that its cards are directly issued by Think Money Ltd, so it is not reliant on another company. Are you covered by a compensation scheme? The Financial Services Compensation Scheme (FSCS) protects your money up to £85,000 for all banks, building societies and credit unions that are authorised by the Prudential Regulation Authority and the Financial Conduct Authority (FCA). Some firms may be authorised and appear on the FCA’s financial services register but if they are not a bank, building society or credit union, they are not covered by the compensation scheme. For example, the FSCS does not protect people if they have money in an electronic money – or e-money – firm or payment services company and it goes bust. Electronic money (including prepaid cards) is considered a method of payment, not a deposit held by a bank or building society, so it is not covered by the FSCS. The FCA says e-money institutions have to safeguard customers’ money – this means they must either keep it separate from their own cash, ie in a separate bank account, or protect it with an insurance policy or comparable guarantee. “This should mean that if that company becomes insolvent, you get most of your money back,” it says. However, the FCA warns that it could take longer to be refunded than if your money was in a bank and some costs are likely to be deducted by the administrator or liquidator of the insolvent company. You can check if a firm is an e-money firm or payment services business by searching the financial services register.