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Warnings have been made that the rise of non-bank payment service providers could be opening transactions up to fewer regulatory measures such as deposit protection and legal recourse.
The Guernsey Financial Services Commission wants to raise awareness of electronic money institutions (EMIs), such as PayDo, so that customers know to check that sufficient consumer protection is offered.
It said these increasingly popular providers which offer e-wallets and pre-paid accounts will only be locally licensed if they are based in the Bailiwick or specifically target residents.
Therefore, checks should take place on how they are licensed and regulated in the home country as there are risks that they may not act in consumers’ best interests and limited options may be available to take action against firms. If they go bust, cash may also be at risk.
“Individuals and businesses within the Bailiwick are able to use payment service providers based elsewhere, however the Commission does not have regulatory remit over those providers based outside the Bailiwick,” it said.
A list of locally licensed financial services businesses can be found HERE.
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