8 April 2026
A safeguarding letter is not a reconciliation
Bank stationery in the annex does not prove that customer liabilities were ever matched to designated funds.
We still see application annexes that treat a designated-account letter as the end of the safeguarding story. The letter matters. It is not the test. The test is whether, on a given day, the sum of customer electronic money can be rebuilt from the wallet ledger and shown to sit in the account the letter describes.
That test fails for ordinary operational reasons. Promotional credits are included in the customer liability but never funded. Merchant payouts are released before the acquiring file clears. Dormant balances are written off in the ledger and left in the bank. In-flight top-ups sit in a payment gateway for two days and are counted twice.
If the wallet is not live, the same problems appear as design choices. The posting rules in the operations manual do not match the draft bank mandate. The trustee is named in the narrative and a different bank is named in the exhibit. The cut-off time in the reconciliation policy is a time the bank cannot report.
A short cut-off test, even on a pilot week, tells you more than another round of letter drafting. We would rather attach one ugly, true reconciliation to the file than three polished letters that have never met the ledger.