How Airwallex Business Accounts work in Singapore and why your funds are safe

In the wake of the collapse of California-based Silicon Valley Bank (SVB) and Signature Bank, we’d like to take a moment to clarify how we keep our customers’ funds safe.

In Singapore, Airwallex’s operating company, Airwallex (Singapore) Pte. Ltd. (‘Airwallex SG’), is licensed as a Major Payment Institution (MPI) and is regulated by the Monetary Authority of Singapore (MAS). Under Singapore law, a MPI must have ‘safeguarding’ measures in place to protect all of our customers' funds in line with rules set by MAS.

How does Airwallex keep customer funds safe?

The purpose of safeguarding is to ensure that your funds are kept separate from Airwallex SG’s own funds that it uses for its business operations and are protected from the moment Airwallex SG receives the funds, until you make a payout or request a redemption (withdrawal) of your balance. 

The funds you deposit into an Airwallex business account are held in a client-segregated trust account, otherwise known as a ring-fenced account that ensures funds are held in trust on your behalf. This separately held money is not available to our creditors, banks, or third parties. That means that whenever you wish to withdraw money or make a payout from your Airwallex account, that money will be available to you. Our operations team reconciles each customer’s account balance against the customer's transaction records and specific instructions.

In the unlikely event of Airwallex ceasing business operations or going into insolvency, liquidation, or bankruptcy, your funds will be safely set aside in the safeguarding account, and you will receive them back with priority over all our other creditors.

Why you should diversify

When you deposit money in a bank in Singapore, the Singapore Deposit Insurance Corporation (SDIC) insures your deposit up to S$75,000. This means customers that hold deposits above S$75,000 with a single bank are left exposed if the bank fails. While it is rare for a bank to fail, recent events are a stark reminder of the importance of managing risk exposure. Any individual or business that has more than S$75,000 in a single bank should consider spreading their cash reserves across more than one financial institution to ensure their funds are protected. Furthermore, foreign currency deposits are not covered by SDIC.

Safeguarding is different to the protection afforded under the SDIC. With the SDIC, you are provided protection by a separate organisation instead of the bank itself in the event of the bank’s insolvency. The organisation pays customers up to the maximum compensation amount.

On the other hand, when you deposit money in an Airwallex business account, you can rest assured that your funds are safeguarded (less certain administrative charges), with no upward limit on the amount. If you’re looking to reduce your risk exposure, an Airwallex business account can offer you the ability to secure funds in excess of SDIC coverage limit – just one of many reasons thousands of businesses choose to hold money with us.

This publication does not constitute legal, tax, or professional advice from Airwallex, nor does it substitute seeking such advice, and makes no express or implied representations / warranties / guarantees regarding content accuracy, completeness, or currency. If you would like to request an update, feel free to contact us at [[email protected]]. Airwallex (Singapore) Pte. Ltd. (201626561Z) is licensed as a Major Payment Institution and regulated by the Monetary Authority of Singapore.