Segregated accounts are used in order to separate client funds and institutions’ operational funds. Segregation of client funds is a primary obligation for any Payment Institution (PI) or Electronic Money Institution (EMI) to acquire a license and operate.
One type of segregated account is a safeguarding account. The provider of this account, a bank, safeguards the funds on behalf of the clients and cancels any claim, including claims of the owner of the safeguarding account, for the funds.