UK Safeguarding Information
Safeguarding: How Modulr keeps customer funds safe
Who is Modulr?
Modulr is the payments automation platform built to scale. Processing more than 200mn transactions and over £180bn in payment value on an annualised basis, Modulr streamlines money movement with accuracy, control, and reliability. Modulr is trusted by over 6,000 businesses to automate payment and reconciliation workflows: removing manual work, lowering costs, and reducing errors.
Through a single platform, Modulr automates how money moves into and out of a business: including payroll, supplier payments, spend management, and payment collection. With over a decade of experience as a regulated payments provider, Modulr delivers the reliability needed to run mission-critical finance operations at scale.
Is Modulr a bank?
Modulr is not a bank, we’re an Electronic Money Institution (EMI). An EMI is an organisation that has been authorised by the regulator to issue e-money accounts and provide payment services. In the UK, we're authorised and regulated by the Financial Conduct Authority (FCA).
How is Modulr different from a bank?
One of the main differences between Modulr, an EMI, and a bank is that banks lend money, whereas EMIs are prohibited from lending money. Specifically, banks receive deposits from customers that they use to lend money out and make a profit on the difference. By contrast, an EMI such as Modulr does not lend any customer funds or offer interest on balances. Our payment services however are regulated by the same payments regulations that apply to banks.
How does Modulr protect customer funds?
From 7 May 2026, UK safeguarding requirements for payment and e-money firms are governed by CASS 15, the FCA’s safeguarding regime. Modulr operates safeguarding arrangements designed to comply with these requirements.
By law, Modulr must safeguard customer funds. This means that money received in exchange for e-money is kept separate from Modulr’s own money and cannot be used for any purpose other than safeguarding customer balances.
Safeguarded funds are held in specially designated accounts with authorised credit institutions (banks), the Bank of England, or invested in secure, liquid assets approved by the FCA. These funds are segregated from the money Modulr uses to operate its business.
Modulr performs daily safeguarding reconciliations to ensure the amount held in safeguarding accounts matches the amount owed to customers. Any discrepancy identified must be investigated and corrected promptly.
Where is money safeguarded?
Modulr safeguards customer funds by holding them with authorised credit institutions (banks), the Bank of England, and, where permitted by regulation, in secure, liquid assets approved by the FCA.
Modulr uses a range of established banking partners and safeguarding arrangements to protect customer funds. Through our direct access to payment systems such as Faster Payments and Bacs, Modulr is also one of a limited number of non-bank payment providers able to hold funds at the Bank of England.
Modulr’s safeguarding arrangements are subject to independent annual audit, with the results provided to the FCA. We are also required to provide monthly safeguarding reporting to the regulator.
In addition, Modulr maintains formal safeguarding agreements with its banking partners and custodians confirming that safeguarded funds are held separately from Modulr’s own funds.
What would happen in the event of Modulr’s insolvency?
Modulr is required by the regulator to maintain safeguarding arrangements and segregate them away from own funds, our technology is designed to support the protection and orderly return of customer funds if the firm were ever to fail.
If Modulr became insolvent, customer funds safeguarded under applicable regulations would be kept separate from Modulr’s own money.
An independent insolvency practitioner would be appointed to oversee the return of customer funds. In certain circumstances, the costs of administering and distributing safeguarded funds may be deducted from the safeguarded funds pool if those costs cannot be met from other available sources. In certain circumstances, this could reduce the amount ultimately returned to customers.
In the unlikely event of insolvency, the return of funds may also take longer than an FSCS compensation process because an insolvency practitioner would need to verify and distribute customer balances.
Who regulates Modulr in the UK?
Modulr FS Ltd (FRN: 900573) is licensed as an authorised E-Money Institution (EMI) and regulated by the Financial Conduct Authority (FCA) and is subject to the safeguarding rules set out in CASS 15 of the FCA Handbook (effective 7 May 2026). Modulr Finance Limited (FRN: 900699) is registered with the Financial Conduct Authority as an EMD Agent of Modulr FS Limited.
