Is Your FX Provider Safe? Six Checks to Run Before You Send Them a Million Pounds

Businesses conduct more due diligence on a £30,000 vehicle purchase than on the firm they route seven-figure sums through every year.

That's not carelessness so much as a reasonable assumption: it involves money, therefore someone must be regulating it thoroughly.

The reality is more nuanced, and the nuances matter.

The thing most people don't know

Money held by a payment institution or e-money firm is not protected by the Financial Services Compensation Scheme.

The FCA is explicit on this: funds held by payment and e-money firms are not directly protected by the FSCS; instead firms must safeguard funds, which can mean customers lose money or experience delays in getting funds returned if the firm fails.

That's a genuine difference from a bank deposit, and it isn't hypothetical — payment firm failures have left business customers waiting a long time for money that was legally theirs.

Safeguarding means client funds are held separately from the firm's own money, in designated accounts, so they can be returned if the firm collapses. Done properly, it works well. Done badly, it doesn't, and the FCA has been clear that some payments firms have not had sufficiently robust safeguarding practices.

What changed in May 2026

The FCA has strengthened the regime. Under Policy Statement PS25/12, new safeguarding rules for payments and e-money firms came into force on 7 May 2026, introducing a supplementary regime sitting within the Client Assets Sourcebook.

In practice this means firms now face materially tighter requirements around record-keeping, reconciliations, monthly regulatory reporting and annual safeguarding audits — with the audit requirement removed for firms holding under £100,000 of customer funds. The FCA has flagged a second phase, a "post-repeal regime", still to come.

The practical upshot for you: a firm's safeguarding arrangements are now a much more meaningful thing to ask about, because there is a clear standard to be measured against.

The six checks

1. Check the FCA Register yourself.

Not the logo on the website. Go to register.fca.org.uk, search the firm, and confirm:

• The legal entity name matches the one on your contract and invoices

• The permissions they hold — authorised payment institution, small payment institution, e-money institution, or an agent of another firm

• Whether there are any restrictions or requirements listed

"Agent of" is worth understanding rather than fearing. It's a legitimate structure, but it means your relationship, and the safeguarding of your money, ultimately sits with the principal firm — not the one whose name is on the email. Ask who the principal is and check them too.

2. Ask how client funds are safeguarded.

A straightforward question with a straightforward answer if the firm has nothing to hide: which institutions hold the safeguarded funds, are they segregated designated accounts, and how frequently are reconciliations performed?

A firm that treats this as an awkward question has told you something useful.

3. Understand exactly what you're not protected against.

FSCS doesn't apply. Ask directly what happens to money in transit, and to any balance held for you, if the firm fails. A good provider will explain this plainly rather than reassure you vaguely. Vague reassurance on this specific question is a warning sign.

4. Look at the accounts.

Companies House is free. Check filing history, whether accounts are filed on time, the shareholders' funds position, and whether auditors have raised anything. A firm holding your money should be financially stable itself, and repeated late filings tell you something about the operational culture even when the balance sheet is fine.

5. Test the pricing transparency.

Ask for the spread in basis points rather than a rate. Ask what happens to your pricing after six months. Ask whether pricing varies by payment size — it almost always does, and small payments are often priced far worse than the headline.

A firm that won't quantify its own margin is a firm whose margin you won't be able to monitor.

6. Ask how they'd handle it going wrong.

Payments do occasionally go astray, get held in compliance, or land short after correspondent deductions. What matters is the response.

• Who's your named contact, and what's the escalation route?

• What's the process and realistic timeframe for a payment recall?

• Who answers the phone outside London hours if you're paying an Asian supplier?

Two things that aren't red flags

For balance — some things look alarming and aren't:

Being an agent or distributor of a larger institution. Common and legitimate. Many well-run brokers operate this way, using the infrastructure and licences of a larger institution. Just confirm who the principal is and satisfy yourself about them.

Being smaller than a bank. Size isn't the same as safety. A well-run specialist firm with proper safeguarding and clear pricing may serve you considerably better than a large institution where you're a small account nobody owns.

The proportionality point

None of this needs to take long. The register check is two minutes, Companies House is five, and the rest is a single conversation.

Set against the sums most businesses move annually, it's the cheapest due diligence in the entire finance function — and, unusually, the checks are exactly the same ones you should run on us.

We'd rather you asked.

William Fuller, Co-Founder of Orbis Exchange Group contact on 0203 918 5622

Ben James, Co-Founder of Orbis Exchange Group contact on 0203 918 5621