What happens if payment provider goes bust?

If your payment provider goes under, here’s what happens to your money

If your payment provider fails and goes into insolvency, a licensed insolvency practitioner steps in to handle the company’s closure and manage its financial responsibilities. Their main task is to track down customer funds and arrange for their return, as long as those funds were separated from the firm's own money, as the rules require.

Your money shouldn’t be mixed with the provider’s accounts, so if the rules were followed, what you’re owed won’t go to pay the firm’s debts. Sometimes, another licensed provider will take on the customer accounts and transfer balances across, so your money goes with you to the new firm.

How payouts from an insolvent provider usually work

The failed provider gets an insolvency practitioner who takes formal control.
They search for and match safeguarded funds with each customer’s details.
You’ll get instructions on how to file your claim, normally using an official online portal or form.
Eligible customers then receive payouts. This process can last several weeks or even months.

Payouts are not always fast. If the provider didn’t keep funds fully apart, some customers may not get everything back. If you’re holding a large amount in a single payment account, that’s something worth considering. More detail on how your money’s protected is available in safeguarding client funds.

Immediate actions if your payment provider collapses

Here are the steps to take straight away:

Download and store statements, payment records and any screen grabs showing your latest balance.
Monitor updates from the provider itself, its regulator and the insolvency practitioner.
File your claim using the correct process, before any deadline given by the practitioner or regulator.
Be wary of unexpected contacts. Scammers often target people affected by a firm’s insolvency.

If you suspect the provider did not follow safeguarding rules, report the issue to the regulator. For those with money at a bank, protection works differently, read about it under deposit guarantee schemes for savings.

Frequently asked questions

Will I definitely get all my money back?

No, there’s no absolute promise. If the firm actually safeguarded the money as required, you should get eligible amounts back, but delays or deductions are possible. Shortfalls can happen if money went missing from safeguarded accounts, and the costly insolvency process itself reduces what’s paid out. You should check the safeguards a provider uses and their licensing details before you trust them with large sums.

Does a deposit guarantee scheme pay out if a payment firm fails?

In nearly every case, no. Payment and e-money providers don’t count as banks; their funds are protected by their duty to safeguard, not by any state deposit insurance. Deposit guarantee schemes only cover money kept in eligible bank accounts. The only exception is where your balance is physically held as a deposit at a protected bank, in your own name. There’s a separate guide that explains the rules for deposit insurance in detail.