Kestrl is a technology platform. We are not a bank, and your funds are not covered by the Financial Services Compensation Scheme (FSCS). Instead, the money you load is safeguarded by our partner, AF Payments Limited, an Electronic Money Institution authorised by the UK Financial Conduct Authority (FRN: 900440).
What is Safeguarding?
Safeguarding is a regulatory requirement that ensures customer funds are kept separate from the company's own money.
FSCS (Banks): Protects up to £120,000 if a bank fails.
Safeguarding (e-money): 100% of your e-money balance is placed into a dedicated, ring-fenced safeguarded account. Because AF Payments cannot lend your money to others, the funds are always there to be returned to you.
Where is the money held?
When you load money into your account, AF Payments immediately places it into a dedicated, ring-fenced safeguarding account. Currently, AF Payments holds these funds with Maybank UK. Maybank does not use these funds for lending or high-risk investments; they simply hold them securely.
What happens if companies fail?
If Kestrl closes: Your money is safe because it is held by AF Payments, not Kestrl. You would still be able to redeem your funds from AF Payments.
If AF Payments closes: The safeguarded funds would be distributed back to customers by an insolvency practitioner. By law, these funds cannot be used to pay AF Payments' other creditors.
Are there any costs?
In the unlikely event that AF Payments becomes insolvent, the costs of the insolvency practitioner (the person hired to return the money to you) would be deducted from the safeguarded pool before funds are distributed. This is the only deduction permitted by law
The FCA’s letter to all e-money institutions: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.fca.org.uk/publication/dear-ceo-letters/dear-ceo-letter-e-money-firms.pdf
The FCA’s advice to customers of e-money institutions: https://www.fca.org.uk/consumers/using-payment-service-providers?