Question 1

What does a pending deposit mean?

Accepted Answer

A pending deposit represents a transaction in which our operations team has not yet allocated the funds. The reference that you have been given should be included in every bank transfer you make so that we can reconcile the funds when necessary.

A transfer won't be reconciled unless you give us confirmation of it. Our operations team may credit the account that you would like the funds to be added to by giving evidence, and this will be reflected up on your balances.

Question 2

What is a foreign exchange spot transaction?

Accepted Answer

A spot FX trade is when the exchange or trade takes place at the same point the transaction is settled. You buy and sell the currency at the current market rate, also known as a spot price. Settlement usually occurs within the days preceding but due to our buying power, and us holding balances in different currencies, we can do this instantly.

Currency pairs may differ, you may trade, G10 currencies, minor pairs, emerging markets, or exotics. It’s worth noting that some currencies are less liquid than others, which might lead to a larger difference in the buy and sell price.

You can read more on FX trading from IG, CityIndex, Investopedia, CMC Markets & Refinitiv.

Question 3

What is a scheduled exchange?

Accepted Answer

Scheduled exchanges are the unique mechanism by which we are able to achieve mid-market rates of exchange. By using peer-to-peer technology and aggregating our client’s requirements into one exchange we can optimise the opportunity to match currency and deliver the best possible rate for all involved.

Here’s how we do it:

Step one: clients transfer funds into their segregated Freemarket escrow account

The nature of the scheduled exchange requires us to operate a pre-funded model, as this is how we are able to match our clients’ currencies – achieving mid-market rates. This means that client’s must transfer the required funds in their entirety prior to the scheduled exchange taking place.

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/3junOv9K5E/Screenshot-2019-10-23-at-11.31.35.png (Customer transfer overview)

Step two: clients book their payment order via the platform

After the exchange procedure is complete, you let us know whether you want to buy or sell, the currencies you want to use for the transaction, and where you need the funds allocated. You will then be included to the following exchange that is scheduled.

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/jzzkEQKGAE/Screenshot-2019-10-29-at-13.34.16.png (Booking exchange instruction overview)

Step three: The scheduled exchange takes place

Depending upon the currency pairing and demand we operate exchanges at periodic intervals throughout the day, with a minimum of one scheduled exchange at midday.

We aim to achieve mid-market rates as often as possible, for as many participants as possible. If your funds are wholly matched with other participants, you both achieve the mid-market rate. If an exchange is incompletely matched, you benefit from our market buying power. We pass on the institutional rate from our network of global banks onto all parties and provide a true banking as a service.

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/pPLqgSm3BO/Screenshot-2019-11-14-at-10.15.00-1024x226.png (Step 3 overview)

Step four: we pay out to your nominated beneficiary

That's it; we transfer the transferred funds to your chosen bank account.

Question 4

What is APP fraud and what measures are in place to prevent it?

Accepted Answer

What is APP (Authorised Push Payment) fraud?

APP Fraud is where individuals are victims of a scam due to fraudsters tricking them into sending money. Some examples (although not limited to) are as follows:

Impersonation scams where fraudsters pretend to be from your bank, a company you may have had interactions with in the past or the police.
Business Email Compromise scammers impersonate a company executive or supplier, sending an email that appears legitimate, instructing an employee to make a payment to a fraudulent account.
Purchase scams that trick you into paying for goods or services that are not brought to the point of completion.
Triangle scams where you may be asked to make a purchase for someone else, beware. This might be a triangle scam, where a scammer uses stolen payment info to buy goods and has you forward them. Secure your data, report the scam — and don’t make any transactions.
Investment scams is when criminals convince victims to ‘invest’ with promises of high or guaranteed returns. In 2023, investment scams comprised a quarter of all APP fraud losses, totalling £107.8 million.

Who is eligible for fraud reimbursement under the new rules?

The reimbursement requirement applies to individuals, micro-enterprises, and small charities, where an APP scam payment is made using Faster Payments or CHAPS in the UK and sent to a relevant account in the UK. To be eligible, you need to raise a claim as soon as you realise it’s a scam, but no later than 13 months of the final payment made to a fraudster as part of the same scam.

The rules require you to take caution when making payments — this is known as the Consumer Standard of Caution. Under the Consumer Standard of Caution, you should always remember to:

Report the fraud to Freemarket as soon as it happens.
Share all information necessary when reporting your claim to help the investigation.
Report the fraud to the police, or consent to Freemarket reporting on your behalf.
Have regard to specific, directed interventions made either by Freemarket, or by a competent national authority e.g. you should take note of any warnings made by Freemarket before you proceed with a payment.

Furthermore, as per clause 14.2 of the Freemarket terms and conditions, APP scams only apply to individuals, small charities and micro-enterprises and do not apply to companies deemed as corporates. Please ensure you are aware of the Terms and Conditions that have been agreed upon.

Every claim will be reviewed individually based on the information you provide as well as any information available from the receiving Payment Service Provider or the police.

How long will it take?

Any eligible APP claim must be reimbursed back within five business days of the victim reporting the scam. It may take longer under certain circumstances if we pause the five-business day reimbursement timescale. This can be done when Freemarket are liaising with yourselves and counterparties to ascertain the nature of the fraud and collect any relevant supporting documents. The timescale for deciding whether to reimburse is then moved to a maximum of 35 business days.

How much can be reimbursed?

The maximum reimbursement amount per claim is £85,000.

What measures have we taken to prevent APP Fraud?

Freemarket utilises best in class fraud detection measures and transaction monitoring to ensure we are playing our part in protecting you from fraud. Additionally, as per section 31 of your terms and conditions, Freemarket have implemented Confirmation of Payee to ensure better protection. Confirmation of Payee is an account name checking service designed to help reduce misdirected payments, and provides greater assurance that payments are being sent and collected from the intended account holder for UK domestic payments.

What can I do to avoid becoming a victim of APP Fraud?

To avoid becoming a victim of APP fraud, here are some effective measures you can take:

Verify Requests: Always double-check the identity of anyone requesting a payment. If you receive a request via email or phone, contact the person or company directly using official contact details,
Don’t rush: Scammers often create a sense of urgency. Take your time to think through the request and do not feel pressured to act immediately,
Be wary of unsolicited communications: If you receive unexpected messages or calls, especially those asking for personal information or payments, be cautious. Scammers often use tactics like impersonation,
Educate yourself: Stay informed about the latest scams and tactics used by fraudsters. Awareness is key to prevention. Keep up to date with Take Five for further advice,
Report suspicious activity: If you suspect you’ve been targeted or have fallen victim to a scam, report it to your local bank and local authorities immediately.

For more information on keeping safe online, please see our help article here.

Will I always be reimbursed?

You won’t get your money back if you’re found to have been complicit in the fraud or grossly negligent (i.e. ignoring clear warnings) or if you’re not an individual, micro-enterprise or small charity. Please note, this exception does not apply to vulnerable consumers.

Question 5

What is One Time Password (OTP)?

Accepted Answer

A one-time password (OTP) is a randomly generated string of letters, numbers, and/or symbols that is delivered to a user to be used for just one login or transaction. An OTP is more secure than a static password, particularly one that was established by the user and may be insecure or used on several accounts.

What are the benefits of OTPs?

OTPs reduce the risk around passwords.

Multi-factor authentication: OTPs can add an additional layer of authentication. Using security tokens, OTPs can be generated for users to provide as an additional form of authentication, which increases security and reduces the risk of a breach.
Time-based OTP (TOTP): this type of OTP is time-based, in that it provides a window of time within which the OTP code will be valid. In general, timesteps are 30-60 seconds in length. If the user does not enter the OTP code within the specified timestep, they must request a new one.

Read more on Twilio, Transmit Security, and Entrust.

Question 6

What is the Confirmation of Payee (CoP)?

Accepted Answer

Confirmation of Payee (CoP) is a name checking service for UK-based payment, introduced by the Payment Systems Regulator (PSR) which has now been successfully implemented by a number of UK banks, building societies and other payment service providers (PSPs). The aim of the service is to reduce certain types of fraud as well as misdirected payments and to give confidence in a transaction knowing it will go to the correct beneficiary.

Prior to this service being implemented, a payer would provide their PSP with all the payee's details, including their bank sort code and account number together with the name of the person or organisation they were intending to pay. The sort code and account number were then used to route the payment in accordance with the instructions given, however, there was no facility for the payer to check and confirm the name on the account being paid ahead of the payment being sent.

CoP is a way of giving payers greater assurance that their payments are being routed to the intended recipient and therefore are not being accidentally or deliberately misdirected.

A CoP check will be performed all new and existing beneficiaries where:

You are paying to an account you do not own
The account sort code resides in UK, Isle of Man, Jersey or Guernsey
There has been no CoP check performed against the beneficiary
The CoP check has expired (this happens after 12 months)

How does it work?

New beneficiary account details

You will be asked to add the new beneficiary bank account details on this screen.

new beneficiary

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/UiU6iPPdkI/new%20bene%20example.jpg (new bene example )

Existing beneficiary account details

new beneficiary

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/ODqplt0vxu/new%20bene%20example.jpg (new bene example (3).jpg)

Account details match

The account details provided match the details the corresponding bank has for the payee.

beneficiary match

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/62JdyGCmed/match%20.jpg (beneficiary match)

Close match

The details you have provided are a close match to the details held by the corresponding bank. We will provide you with the name on the account the bank has for you to decide to continue or not.

close match

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/gGQKaCaI7n/close%20match.jpg (close match)

No match

The details you have provided do not match with the details held by the corresponding bank. You have an option to continue or not.

no match

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/jRVTeDyMss/no%20match.jpg (no match)

Account type mismatch

The details you have provided do not match with the type of account at the corresponding bank. You have an option to continue or not.

account mismatch

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/4rOUBzCkDp/account%20type%20mismatch.jpg (account type mismatch (1).jpg)

Account not found

The account details do not match any real bank account. You will not be able to continue.

account not found

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/fnDSsgZVaa/resources/hee7iknIhl/account%20not%20found.jpg (account not found)

If you have any questions or issues with Confirmation of Payee please do not hesitate to contact our team via: support@wearefreemarket.com

Question 7

What is the difference between local and international payments?

Accepted Answer

Electronic instructions are used in both local and international transactions to transmit a secure message across a network and make funds available in the beneficiary's account. Their verification process and payment method they employ varies, which therefore has an impact on the transaction's length and cost.

For example, domestic wires in the US use the CHIPS of Fedwire systems, in the EU local payments use SEPA and in the UK local payments use CHAPS or Faster Payments. Most international wire transfers are communicated via SWIFT, a network of over 10,000 banks and financial institutions spread over 200 countries.

Question 8

What is your risk appetite?

Accepted Answer

FreemarketFX Limited’s onboarding and transactional risk appetite is the aggregate level of risk that it is willing to assume with regards to the clients it has and transactions it processes. Freemarket takes a risk-based approach to achieving its strategic and commercial objectives and a core focus of this is around both the clients and transactions it interacts with.

Within the overall risk framework, Freemarket has robust systems and controls that continually evolve to mitigate financial crime. With these systems and controls, Freemarket aims to Deter, Detect and Disrupt financial crime. Maintaining these and treating clients fairly, is at the heart of Freemarket and such standards are expected from all stakeholders. Freemarket has stringent procedures regarding the governance of its risk framework and strict policies in relation to PEPs, illegal activity, sanctioned counterparties, criminals, and individuals associated with terrorism.

FreemarketFX Limited onboards Small, Medium or Large Corporates only. This does not include Sole Traders, Micro-Enterprises or Small Charities.

Freemarket is committed to complying with all applicable laws and regulations including those related to anti-money laundering, PEP’s, counter-terrorism financing, sanctions, and export control laws. We maintain robust systems, policies, procedures and controls to help protect our platform and to deter, detect and disrupt financial crime. In addition, our banking partners also maintain requirements and restrictions that must be adhered to, including restrictions on certain industries, activities, and countries, as listed below.

Failure to comply with these restrictions can result in delayed payments or declined payments with continuous breaches leading to account closure. Please contact your Relationship Manager for additional information.

What types of activity are not permitted?

Understanding what’s prohibited

In recognition of the scale and extent of the business’s systems and policies, Freemarket prohibits engaging or pursuing clients that fall within the following set of criteria:

Prohibited Locations

Onboarding of a company with any Subsidiaries, UBO’s, Directors or Operations resident in or websites targeting the following sanctioned countries: Iran, North Korea, Syria, Myanmar, Cuba, Venezuela, Russia.

View the Freemarket restricted jurisdictions for a full list of countries we do not do business in or with.

Prohibited Businesses

The following list of categories of businesses and business practices are explicitly prohibited from using our services and platform:

Businesses operating or running Hawala (informal banking system)
Companies engaged in or providing illegal drugs and/or unlicensed drug related activity
Unregulated pharmaceuticals/food supplement companies (nutraceuticals)
Activities relating to defence and munitions, including dual use
Adult websites or services with prostitution, and the broadcasting/publication of pornography
Binary options or unregulated investments
Companies formed of bearer shares
Company structures which include only nominee directors (there must always be individual directors)
Companies dealing in counterfeit goods
Companies dealing with cultural artefacts, ivory or other items related to protected species, or with items of archaeological, historical religious or rare scientific value significance.
Companies structured and operating Piracy or illegal streaming
Political / religious organisations engaged in hate speech
Pyramid Schemes / multi-level marketing (MLM) schemes
Companies dealing in non-electronic funds
Unregulated institutions that should be regulated
Shell banks
Shell companies (a company having no physical presence, no employees or no commercial activity in its registered jurisdiction)
‘Get rich quick’ schemes (proposal to pay high rates of return over a small period in return for a small investment)
Unregulated charities
Banks not located/domiciled onshore

Additional requirements for the following industries

Clients who fall into any one of the four verticals identified below must meet an initial set of criteria and further set of vertical-specific criteria to onboard with Freemarket.

Initial risk assessment criteria

Must have no AML/CTF failings/fines that have not been sufficiently remediated,
Must adhere to Freemarket’s industry specific policies i.e. FI control Framework, Gambling Policy, Crypto Policy,
Must adhere to regulatory limitations applicable to the jurisdiction of their client-base.

Further risk assessment criteria by vertical

The following are the additional risk assessment criteria to evaluate prospective clients.

Question 9

What kind of documents should I submit for review with compliance?

Accepted Answer

On some occasions, we may request additional documentation from you to process your application, this allows us to successfully review your account without any delay. Each application is different, and we would ask for certain documents depending on your application, such as; where the company is regulated, financial statements, incorporation details, nationality (driving license or passport), the country of residence, articles of memorandum etc.

Question 10

What kind of payments can I make?

Accepted Answer

There are a number of different payments schemes and types of payments that you can make.

Cross-border Payments or International Payments: a cross-border payment or international payment is sending a payment from one country to another. They are key for businesses that operate in different jurisdictions and plan to do business in new markets.
Domestic Payment: a domestic payment within the same country where the bank and merchant’s account are registered in the same country, in most cases, the currency is the same, so no FX or Foreign Exchange is required.

Types of payment schemes

SWIFT: this is used to send or receive international payments via the SWIFT payment network.
SEPA: SEPA stands for Single Euro Payments Area and it's a payment type used to transfer euro within the EEA.
SEPA Instant: allow you to send 100,000 per transaction, they are available 24/7, 365 days a year, and take no more than 10 seconds to reach payee’s account from the payer’s.
Faster Payments (FPS): for the majority of UK-based payments Faster Payments is in place for bank-to-bank payments and designed to speed up the process of sending money. It has a limit in place of £1m per transaction.
Target2: is the real-time gross settlement (RTGS) system with payment transactions being settled processing euro payments.
CHAPS: CHAPS payments allow you to make same-day, high-value electronic payments.
BACS: is designed to operate a bank-to-bank payment scheme, payments can take up to three working days to clear.