Overview
Juni is an e-money institution (EMI) that protects your funds through a process called "safeguarding," which is different from how a bank protects your money with deposit insurance.
How is your e-money protected at Juni?
Safeguarding is a set of laws that outlines how an e-money institution must protect your funds. These rules ensure that if an e-money institution fails, your money is kept safe and can be returned to you.
How does it work?
When an e-money institution receives your money, it must place it in a dedicated safeguarding account at a bank or invest it in low-risk assets approved by the regulator. Your funds stay in these accounts or investments until you spend them.
If an e-money institution fails, the safeguarding account is a pool of money specifically designated to repay all customers. By law, these funds are protected from other creditors of the failed institution. The only thing that can be paid from these accounts before customers are repaid is the cost of the appointed receiver.
How is safeguarding different from bank protection?
The main difference is that a bank's protection, such as FSCS or DGS, is managed by an independent statutory organisation, while safeguarding is handled by the e-money institution itself. If a bank fails, the independent organisation is legally obligated to repay eligible customers up to a maximum amount, usually within seven days.
When an e-money institution like Juni fails, customer claims are paid from the safeguarding account. This is because the institution can't lend out the money it receives from customers, so the funds in the safeguarding account cover its debts to them, as required by law.
While customers should, in principle, get their money back if an e-money institution goes out of business, the payout may take longer than it would with a bank.
See Juni’s Swedish e-money licence here.