E-Money Facility Agreements & Benefits for Small Business Owners

Two Hands Shaking In Agreement

As a small business owner, you’re probably always looking for ways to streamline operations and boost efficiency. New digital tools make things easier, but sometimes it can be tough to stay on top of all the latest options and what it means for your business. We recently launched Preloading, our revolutionary feature that lets you add your own money to your balance. This way, you can spend more than your credit limit while still earning 1% cashback on all card purchases. 

To use Preloading, you need to sign an E-Money Facility Agreement. This guide will explain what that agreement is and how it can benefit small business owners like you.

What is an E-Money Facility Agreement?

An E-Money Facility Agreement is a contract that means you can hold electronic money (aka e-money) and make transactions using that balance. When you preload your account, those funds count as e-money. 

The key components to understand in the agreement are:

  1. E-Money Issuer: We (Capital on Tap) are the authorised and regulated e-money issuer that provides this service.
  2. E-Money Holder: You, as the business customer, are the e-money holder who can load funds into your e-money account via Preloading and use that balance to make payments.
  3. E-Money: The electronic money loaded into your Account that you solely own and can use for transactions.
  4. Safeguarding: Your loaded funds are safeguarded and kept separate from our operational funds in accordance with regulations.
  5. AML/KYC: We conduct anti-money laundering (AML) and know your customer checks (KYC) on you as the account holder to comply with regulations.

By agreeing to the E-Money Facility Agreement, you accept the terms for holding and using the e-money issued by us. This agreement ensures our e-money services comply with the relevant laws and regulations under our FCA authorisation.

You can review the E-Money Facility Agreement here.

Benefits for small business owners

Signing the E-Money Facility Agreement offers several advantages for you and your business. Let’s take a look at some of the key benefits: 

Streamlined transactions

Preloading lets you earn 1% cash back on every pound you spend, including the money you add to your account - with no limits. It also makes accounting easier by putting all your business spending, whether using your credit or preloaded money, into one monthly statement. And you can pay down balances faster by using your preloaded cash to cover pending charges right away.

Enhanced financial control

With Preloading, you can increase how much you're able to spend by adding money on top of your credit limit. This means you never have to worry about maxing out your spending ability unexpectedly. Preloading also helps smooth out cash flow since you can use both your credit and preloaded money for expenses. And by prepaying amounts due with preloaded funds, you can free up available credit.

Flexibility and convenience

You can add as much or as little money as you need to your account, whenever you need it. After Preloading, that money is available for you to use almost instantly. And it's easy to preload - just transfer funds from your bank or set up a Direct Debit.

Security measures

Your preloaded money is kept safe and separate from Capital on Tap's operational funds, protecting it if insolvency occurs. We also follow strict anti-money laundering rules and verify customer identities to keep everything secure and above-board. You can feel confident your money is protected.

Do I need to sign an E-Money Facility Agreement? 

For new Capital on Tap customers, signing the E-Money Facility Agreement is mandatory. However, for existing customers, it's an optional agreement needed to access the Preloading feature and its associated benefits.

The E-Money Facility Agreement governs the terms for holding and using electronic money (e-money) in your account through Preloading. By agreeing to it, you unlock the valuable advantages mentioned earlier like increasing spending power, smoothing cash flow, and simplifying accounting.

That said, your funds remain safeguarded even without this agreement. Without the e-money agreement, we will return any in-credit balance to you. Whilst the funds are held with us, they are appropriately ringfenced and protected against insolvency risks, regardless of whether you opt for Preloading.

The bottom line

For existing customers looking to unlock Preloading's powerful capabilities, signing the E-Money Facility Agreement is a simple process that introduces great new benefits for expense management. However, you can rest assured that your Capital on Tap experience remains secure with or without this agreement.

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