Protecting payment services users-related funds is part of a core regulatory obligation (PSD 2 - Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on Payment Services in the European internal market) of regulated payment institutions.
Lemon Way secures the funds of payment services users through the opening & maintenance of dedicated segregation accounts opened in the books of core banking partners, on which funds received on D from payment services users are transferred no later than D+1.
Segregation accounts ensure a clear separation between collected third-party funds (your funds/the funds of your clients) and funds from Lemon Way, so that third-party funds are never used for the wrong purpose.
Segregation accounts differ from current accounts as they:
• Cannot be part of a merger (physical or notional) of accounts
• Cannot be overdrawn (no overdraft authorized for this type of account)
• Cannot be direct-debited
• Cannot receive/send money from/to the outside world; but can only receive/send money from/to other accounts owned by Lemon Way
• Ensure full protection of payment accounts & services users (Articles L. 522-17 of the French Monetary & Financial Code and 34 of the decree of the 29th of October 2009 related to the prudential regulation of Payment Institutions regarding the protection of third-party funds)