I think they hold the money at Barclays or Lloyds, but never heard anything more on that aspect
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Curious, it looks like their sort code belongs to Modulr FS. Wonder if itâs a wider problem or just Revolut. 
That name does ring a bell I must say
As to the other point, when I remembered Barclays or Lloyds that actually wasnât me only vaguely recalling but, it turns out because they spread the money across the two
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Strange, worked fine this morning
Wonder what time it stopped working?
Salary into Revolut? Thatâs very daring. A certain person on the other place would be proud though!
âBeleaguered fintech Revolutâ
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Not sure about when it started, but they claim it was fixed about 4 hours ago.
Nah, from
I kind of read that people were having problems getting their salary but I think itâs more it broke after and they canât spend
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Dozens also had problems with transfers, so almost certainly a Modulr issue
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No, they currently use 04-00-72. I believe it will change later this year as they move provider.
I believe Revolut use 04-00-75
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Modulr has 040072 and 040075, so Revolut and dozens use different codes, but the same provider.
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It may be worth reading the e-money license regulation to get a complete understanding, just a few points:
- The money that is received needs to be kept separate segregated accounts and CANNOT be lent out (even earn interest).
- The money needs to be kept separate in segregated accounts in a registered UK bank such as RBS, in the case of Revolut the money is kept with Lloyds.
- The UK bank needs to keep this money separately segregated and cannot be lent out even by the bank, so if Lloyds goes into administration then money in these accounts will not be impacted even if itâs above the ÂŁ80,000 threshold and cannot be touched by the bankâs administrators.
- In the case of Revolut going into administration, and assuming Revolut has no assets, then the only money that Revolut customers may be liable for is the legal costs and the logistic costs of returning the money however this should, in theory, be no more than 0.5-3% of the total asset. (So, if you have ÂŁ100, then the maximum you may lose is a few quid) However, if Revolut has assets then it would be those assets which would cover the legal costs and logistic costs of returning the money to their customers. The total assets (customers money) held in Revolt maybe billions and the legal costs of a few million is small fry.
- Lloyds would be required in the case of Revolut administration to lock the accounts, preventing Revolut or the administration from accessing the money. So the administration can not simply take the money to cover revoluts debts. They are only unlocked as soon as an agreed method is agreed with FCA to safely return the customers money to the customers (minus the legal and logistics fees). A similar situation happened after Glint went into administration and also Wirecard when assets were temporarily frozen to allow a full audit to take place.
Now, the question remains is a UK license bank safer than a money e-money account? We only need to go back to 2008 when virtually every major UK bank had to be bailed out. In such an instance, e-money accounts which are technically based on full-reserve banking would have survived the 2008 banking crash without any government help.
Now you can argue that your money is protected by the FCA upto ÂŁ80,000, but it means if you have any saving over ÂŁ80,000 such as a pension it is not going to be protected. For the government to pay every bank customer ÂŁ80,000 they would have to resort to printing money virtually out of thin air (As the government has no money)which we all will pay for from inflation or higher prices in the shop (a hidden tax).
You may argue that even those who have money in e-money account will have to pay this hidden tax, but this is not always true. E-Money providers such as Revolut, Tally and even Dozens offer means to protect their customers against fiat currency inflation, such as fixing money against gold, shares or cryptocurrency. E-Money providers can provide innovative solutions which a banking license may prevent banks from offering.
So, I would argue money is safer overall in a 100% reserve banking system.
That very fairly sums up what Iâve mentioned a few times with varying success of how well others understand.
The safety of anyoneâs money is important and I trust both of the systems available. Though if a giant bank such as Lloydâs or Barclays failed thatâs a lot of money the government would be paying out. Makes me wonder how they could afford it. They arenât managing the economy very well as it is. Iâd have more faith in the banks themselves.
Thanks for pointing that out, I have actually read most of it, and whilst I think that you are making very good points (and a perfectly valid reply to my original post), I would like to clarify a couple of things:
It cannot be lent out, but it can actually be âinvestedâ. I know that they are completely different terms, but the reason why I brought it up is that it sounded (and please correct me if I am wrong, I will happily edit this) that you were categorically stating that the money does not go anywhere, where it indeed can.
Whilst it is correct (as I stated in the post that you replied to), that the âcutâ from each individualâs money might be small, I, personally, would not want to take that risk, which can be avoided by having a bank license and therefore deposit protection up to ÂŁ85,000, not ÂŁ80,000 like it was mentioned a few times in your post.
I get where you are coming from, but, unfortunately, I know first hand that that is not how an administration process works. A company will (almost) always have assets. With that being said, the liquidation of those assets will almost never cover the payouts to all of the companyâs creditors, which is the reason (or part of) why administrators exist. A company going into administration does not immediately mean that it has no assets. For example, in the case of a compulsory administration, a company has to go into administration when it finds out that it will be spending money that it will not be able to make up for with current incomings.
The reason why I am bringing this up is that, when a company goes into administration, there will always be a shortfall of money, and this translates into creditors getting âxâ pence on the pound of their owed moneys.
As customers, we would be creditors. We would be at the top of the list, but, as you mentioned, we might still lose money should this happen.
The point I made in my original post was not intended as a âI hate Revolutâ kind of comment. I do like their offering, I think their offers and account tiers is fantastic (a direction that other banks might want to start steering into), but my main point is that, despite segregated accounts, Revolut is not a UK licensed bank, which comes with âperksâ as you said, but also downsides. I was merely pointing one of the downsides out.
I think we need to refer directly to the law:
http://www.legislation.gov.uk/uksi/2011/99/pdfs/uksi_20110099_en.pdf
Please refer to section 24:
â
Insolvency events 24.â(1) Subject to paragraph (2), where there is an insolvency eventâ (a)the claims of electronic money holders are to be paid from the asset pool in priority to all other creditors; and (b)until all the claims of electronic money holders have been paid, no right of set-off or security right may be exercised in respect of the asset pool except to the extent that the right of set-off relates to fees and expenses in relation to operating an account held in accordance with regulation 21(2)(a) or (b) or 22(1)(b). (2)The claims referred to in paragraph (1)(a) shall not be subject to the priority of expenses of an insolvency proceeding except in respect of the costs of distributing the asset pool. (3)An electronic money institution must maintain organisational arrangements sufficient to minimise the risk of the loss or diminution of relevant funds or relevant assets through fraud, misuse, negligence or poor administration
In the case of an insolvency event, you are not just a creditor but an âelectronic money holderâ, the money needs to be returned in the case of a âinsolvency eventâ:, the money in the account is legally âSafeguardedâ and NOT an asset of the e-money provider and legally belongs to you. Under the regulation " An electronic money institution must keep relevant funds segregated from any other funds that it holds". The regulation is about protecting the money you put into an e-money provider including keeping the money separate and the requirement to audit the money. It is in black and white if there is an insolvency event the money needs to be returned ", the ONLY risk is the cost of returning the money, and they cannot hold e-money holders liable to the expenses from the insolvency proceeding. "(1)(a) shall not be subject to the priority of expenses of an insolvency proceeding except in respect of the costs of distributing the asset pool. "
What I am saying is the money you give to Revolut, is NOT legally an asset to revolut and cannot be used to pay revolut creditors, the money is legally safeguarded at every level, even when the money is held by Lloyds/RBS, they can not legally touch that money, lend it out even in the case of Lloyds/RBS going into administration.
The ONLY liability as an e-money holder in the case of administration is the âcosts of distributing the asset pool costs of distributing the asset poolâ
Otherwise, your money is protected even when you hold over ÂŁ85,000.
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I donât see how thereâs protection against insolvency events at the banks where the funds are held. I accept your point about insolvency events in relation to the e-money provider itself.
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I hope we can all agree that it is a right mess and filled with potential for delays and confusion as compared to FSCS protection
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If an E-Money License was better than a full banking license then why would Revolut actively be planning and working on getting a UK banking license!
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Agree. No doubt that a UK banking license would be a great selling point for Revolut and would bring peace of mind to customers and prospective customers alike.
In this and other forums it is very common to hear âI only have limited funds in Revolut because they are not fully regulated and just in case things go the wrong wayâ. A UK banking licence would kill such objection
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Well, not if Revolut are just as trigger-happy blocking accounts without a big enough compliance team to sort out locked accounts quicklyâŚ
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