We are writing to tell you more about the K Wearables prepaid Mastercard that you are using, some of its features and how your funds are protected whilst they are with us, Moorwand Limited. It’s important to us that you are aware that we are the regulated payment service provider behind K Wearables prepaid Mastercard Moorwand is an authorised Electronic Money Institution (EMI), regulated by the Financial Conduct Authority (FCA) in the UK under the Electronic Money Regulations 2011 for the issuance of electronic money and the provision of payment services.
The K Ring, linked to your K Wearables prepaid Mastercard enables you to make payments in shops. The service is regulated by the Financial Conduct Authority (FCA) as an electronic money account. This means that the money that you have in your account is backed by money that we hold in a separate bank account.
While this may sound similar to what a bank does when funds are received into a current account, we are not a bank and therefore:
- we do not take your money as a deposit to use for our own purposes or lend to other customers; and
- your e-money is not covered by the Financial Services Compensation Scheme (FSCS).
To ensure your money is safe we follow a process known as ‘safeguarding’ which is a regulatory requirement for all EMIs. In this process we keep your money separate from our own money and place it in a safeguarding account with a separate bank. We have to have an independent expert check that we are meeting our safeguarding obligations every year and the expert’s report confirming this is available to the FCA on request.
This protection continues to be in place in the event of Moorwand going out of business; this is because that money will continue to be held by the bank and be available for you, and will not be available to third parties. In that event, an insolvency practitioner would be appointed to return the funds we have safeguarded to our customers. This means you would get most of your money back, except for the costs deducted by the insolvency practitioner for distributing the money to our customers. In addition, due to the insolvency process, it could take longer for money to be returned to you than if the account was held by a bank.
Banks adopt a different means of protecting deposited funds. They participate in the Financial Services Compensation Scheme (FSCS) – e-money issuers do not. The FSCS acts like an insurance policy for bank accounts and pays out up to a maximum of £85,000 per eligible person, per bank, building society or credit union or up to £170,000 for joint accounts. This means if you have money in multiple accounts with banks, building societies or credit unions that are part of the same group (and share a banking licence) the FSCS treats them as one bank.
More information about using a non-bank payment service provider and the protections they offer can be found on the FCA’s website at https://www.fca.org.uk/consumers/using-payment-service-providers
We are available to discuss this further if you have any questions or if you would like to find out more. Please contact us via firstname.lastname@example.org