Segregated accounts are separate bank accounts that authorised payment service providers use to keep their own funds separate from funds held on behalf of users, such as marketplaces and their sellers. In France, the Monetary and Financial Code requires these funds to be protected, typically through segregated accounts. Marketplaces that collect funds from customers before transferring the funds to sellers are subject to this requirement—either directly or through their payment service providers.

This is a significant obligation because it typically involves large sums of funds. For example, French e-commerce generated €196.4 billion in revenue in 2025. Marketplaces represented a significant portion, accounting for 29% of e-commerce product sales in 2023. Therefore, the consequences of poorly managed segregation are immediate. They include penalties, suspension of business activities, and prevention of sellers from accessing funds.

In this article, we explain segregated accounts, including their related regulations, roles and functions for e-commerce marketplaces, setup processes, and a case study of the Morning fintech company.

Key takeaways

• Segregated accounts are separate bank accounts opened by authorised payment service providers at credit institutions. Providers use these accounts to isolate funds belonging to marketplace sellers from its own funds.
  
• Segregated accounts differ from regular bank and payment accounts. With regular accounts, account holders can use funds freely. Payment accounts are individual balances recorded in a provider’s system.
  
• In France, segregated accounts are strictly regulated by Article L 522-17 and Article L 526-32 of the Monetary and Financial Code, which implemented the revised Payment Services Directive (PSD2). The Prudential Supervision and Resolution Authority (Autorité de contrôle prudentiel et de résolution, or ACPR) grants and monitors authorisations of payment service providers throughout their lifespans.
  
• For marketplaces, segregated accounts serve several purposes. They retain funds between collection and payout to sellers, ensure legal compliance amid complex payment requirements, separate the marketplace’s commission from the sellers’ funds, and help manage Know Your Customer (KYC) verification deadlines while keeping funds separate.
  
• Most marketplaces choose to outsource segregation through authorised payment service providers instead of seeking authorisation themselves.
  

What is a segregated account?

A segregated account is a separate bank account opened by a payment-service provider (PSP) at a credit institution. Funds that belong to marketplace sellers are held separately from the provider's own funds. The funds are set aside for marketplace sellers, even if a provider enters into bankruptcy.

This obligation is governed by Section 1, Paragraph 1 of Article L 522-17 of the Monetary and Financial Code. It states that funds received from users of payment-service providers (PSPs) must be kept separate from funds of other individuals or businesses. In other words, funds that belong to marketplace customers and sellers must never commingle with the payment-service provider's (PSP) funds.

What is the difference between a segregated account and a regular bank account?

A regular bank account belongs to the account holder, and the account holder can use the funds however they choose. A segregated account is opened by a payment-service provider (PSP) to hold its users' funds. These funds can only be used for the users' operations. The funds are shielded from the provider's creditors and must always be kept separate from the provider's funds.

Below, we outline the three main differences between segregated accounts and regular bank accounts.

Account holders

Legally, the account holder of a segregated account is the payment-service provider (PSP). Financially, however, the funds belong to the users of the payment-service provider (PSP) (i.e., the marketplace's customers and sellers). In a regular bank account, these two roles are combined into a single person. However, with segregated accounts, they are separate.

This separation is formalised in an account agreement signed by the payment-service provider (PSP) and an account-holding bank. The agreement must stipulate that funds cannot commingle and must mention distribution of funds deposited.

Uses of funds

A payment-service provider (PSP) cannot draw on the segregated account to finance a product launch, marketing campaign, or working capital needs. However, funds in a regular bank account can be used freely.

Actions by creditors

Article L 522-17 refers to Article L 613-30-1 of the Monetary and Financial Code. This article stipulates that segregated funds are shielded from claims by a provider's other creditors. This is even the case in the event of enforcement or collections procedures. Conversely, regular accounts can be seized by the account holder's creditors.

What is the difference between a segregated account and a payment account?

Segregated accounts are actual bank accounts opened by payment-service providers (PSPs) at credit institutions. The accounts hold users' funds separately. Payment accounts are individual customers' balances, as recorded in the provider's system. One is a collective account held at a bank. The other is an internal, individual accounting record.

Payment accounts are defined in Section I of Article L 314-1 of the Monetary and Financial Code. They are accounts held on behalf of one or more persons that are used to make payments. A payment account includes the information a seller sees in their marketplace interface: their individual balances, sales credits, and commissions owed. Payment accounts are not bank accounts because they do not hold funds. Instead, the actual funds are kept in a segregated account.

However, the two account types are related. Protected funds are recorded in a provider's system by an account balance that must be backed by segregated funds. The funds must also reflect current transactions and payment periods.

What regulations apply to segregated accounts in France?

In France, segregated accounts are governed by Article L 522-17 of the Monetary and Financial Code for payment institutions. This is a category of payment service provider. Segregated accounts are also governed by Article L 526-32 of the Monetary and Financial Code for e-fund institutions.

The Prudential Supervision and Resolution Authority (Autorité de contrôle prudentiel et de résolution, or ACPR) verifies the mechanisms in place for protecting customer funds before authorising payment service providers to conduct business. It also continually monitors the mechanisms.

These regulations implement European Directive (EU) 2015/2366, known as the revised Payment Services Directive (PSD2). The directive was transposed into French law by Order No. 2017-1252 of August 9, 2017. The law allows payment institutions to choose between two methods to protect funds:

• Segregate funds in a checking account opened at an authorised credit institution in a member state of the EU or European Economic Area (EEA). The funds can also be invested into low-risk financial instruments—including securities issued by qualified money market funds—and held in an account opened especially for that purpose.
  
• Purchase an insurance policy or comparable guarantee from an insurance company, finance company, or credit institution belonging to a different group.
  

Note: The future European framework—composed of Payment Services Directive 3 (PSD3) and the proposed Payment Services Regulation—will change particulars around fund protection but retain the same principles. Segregated accounts will remain an important mechanism.

What is the purpose of segregated accounts?

Segregated accounts are a landing place for funds belonging to a marketplace's sellers. The account holds funds after collection from customers but before payout to sellers, which allows payments to be distributed to multiple recipients, separates the marketplace's commissions from sellers' funds, and absorbs verification delays without commingling funds.

Here are the different ways marketplaces can use segregated accounts.

Hold funds between collection and payout

With marketplaces, it can take days or weeks after a customer pays for the seller to receive the funds. This occurs for a variety of reasons, such as shipping confirmations, right of withdrawal, and contractual reversal times.

Throughout this period, funds belonging to the marketplace's sellers must be held somewhere. Therefore, it is kept in a segregated account.

Ensure legal compliance amid complex payment requirements

Marketplaces are built on payment mechanisms that require funds to be immobilised, traceable, and distributed to an identified recipient. For example, a single payment can be divided among multiple sellers for a single order or split into multiple payments.

This is also the case when funds are withheld until delivery, a partial refund or credit note must be issued, or a retention applies. Without a segregated account, the funds for these transactions would come out of the marketplace's funds, which is prohibited by regulations.

Separate marketplace commissions from seller funds

Commissions are calculated at the time of collection, but they are not paid until a certain point defined by the contract. That point varies depending on the marketplace. It might be the time of confirmation, shipping, or delivery or a specific due date.

Segregation requires that this transfer be explicitly accounted for rather than left implicit. This allows the marketplace to know at all times what portion of its balance actually belongs to it.

Absorb verification times without commingling funds

Sellers with incomplete Know Your Customer (KYC) profiles cannot be paid. A provider must first perform its due diligence. In the meantime, funds credited to sellers are held in a segregated account until the verification is complete.

How do segregated accounts work for marketplaces?

Customers pay through the marketplace. The funds arrive at the payment-service provider (PSP) and are deposited into a segregated account no later than the end of the next working day. Internal records track each seller's balance until the final payout.

Section 1, Paragraph 1 of Article L 522-17 of the Monetary and Financial Code requires funds remaining in the customer's account at the end of the next working day after receipt (as defined by Article L 133-4 of the Monetary and Financial Code) to be deposited into a separate account. A payment institution's operations are organised around this requirement.

When an order is placed on a marketplace, the segregated account is at the centre of the circuit. Funds take the following path, from collection to payout.

Collect funds

The customer pays by card, bank transfer, debit, or digital wallet. The funds are sent to the marketplace's payment-service provider (PSP). At this stage, the funds do not belong to either the marketplace or the seller. They are held on behalf of a third party.

Deposit into the segregated account

The provider deposits the funds into a segregated account opened at an account-holding bank within the time period required by law (i.e., no later than the end of the next working day). In practice, accounts are typically collective and hold funds for all users, instead of having individual accounts for each seller.

Article L 522-17 of the Monetary and Financial Code requires that accounts be separate from the payment-service provider's (PSP) funds but does not require them to be unique accounts. The same provider can open multiple accounts at multiple institutions. In fact, such diversification is typically encouraged.

Credit seller's payment account

The payment-service provider's (PSP) system tracks how much of the total is owed to each seller. This is done through payment accounts, which are defined by Article L 314-1 of the Monetary and Financial Code. Each seller has their own balance composed of their sales minus commissions, refunds, and payouts.

Retain funds until payout

According to marketplace rules, funds must be immobilised until shipping is confirmed, the right of withdrawal has expired, or the contractual due date arrives. Events that could change the account balance (e.g., cancellations, partial refunds, credit notes, customer disputes) take place within this window.

Process failed payments and payment disputes

Payment disputes typically occur after payout. The payment-service provider (PSP) debits the seller's payment account, which could cause the balance to fall below zero. The seller's terms and conditions must stipulate who bears the risk—the marketplace or the seller—and how the funds will be recovered.

Pay out to seller

The payment-service provider (PSP) performs its due diligence and verifies the recipient. Then, it pays out the funds to the seller's bank account. The payment account and segregated account balances are both reduced.

Perform daily reconciliation

If a segregated account balance falls below the total amount owed to a customer, the account is considered insufficient. Insufficiencies must be reported and rectified immediately. Payment institutions typically perform batch reconciliations—often several times a day for internal verification—and report on protection of the funds in regulatory filings to supervisory authorities.

If funds collected are intended for both future payments and other services, Section II of Article L 522-17 of the Monetary and Financial Code shields the portion allocated for payments from creditors. If the payment portion is variable, the amount must be determined in accordance with rules stipulated by decree. If a marketplace collects funds representing the sale price, commission, shipping cost, and seller subscription all at once, it must model the breakdown of each amount before launch.

Why do marketplaces use segregated accounts?

Marketplaces that collect funds for third parties must ensure that the funds are protected, typically by using a segregated account. The marketplace can open the account itself if it is authorised or, more commonly, through an authorised payment service provider.

Without this system, a marketplace can risk criminal penalties, jeopardise its sellers’ funds, lose the trust of its banking partners, and undermine its valuation during a fundraising round or sale.

Below, we explain the main reasons marketplaces use segregated accounts.

Legal requirements

Marketplaces are legally required to protect funds they collect for third parties. In most cases, a segregated account fulfils this requirement.

Some cases fall outside of payment service rules, such as branded gift cards or small networks that accept a specific form of payment, but these are special cases.

Immediate regulatory and criminal consequences

Offering payment services without authorisation is punishable by three years in prison and a €375,000 fine, under Article L 572-5 of the Monetary and Financial Code.

Furthermore, the ACPR immediately applies regulatory measures in the case of insufficient segregation by an authorised provider. These include a ban on providing payment services and debiting the segregated account, meaning business activities must cease completely until the violation is rectified.

Banking relationships

Account-holding and acquiring banks require a sound, legally compliant setup. Otherwise, they could violate payment network rules. If a platform cannot show where it holds funds collected on behalf of third parties, banks can refuse relationships, close accounts, or terminate contracts.

Business valuations when fundraising or selling

Compliance with payment rules is subject to close scrutiny during a fundraising round or sale. A non-compliant payment setup can cause a drop in valuation or price or lead to operations being suspended. Conversely, documented segregation, up-to-date agreements, and auditable reconciliations are considered intangible assets.

Selling point for recruiting sellers

Professional sellers typically have funds pending payment on marketplaces. Segregated accounts ensure that these funds remain protected and allocated to sellers, even in the event of default. For a seller whose cash flow depends on these payments, this security is a key factor in choosing a marketplace.

Case study: Morning fintech company

One example of the consequences of insufficient segregation is the Morning fintech company. Morning (formerly Payname) was a French online payment platform. In December 2016, the ACPR applied regulatory measures to the company.

In Decision No. 2016-C-91 of 1 December 2016, the ACPR barred Morning from providing payment services and debiting its segregated account. This occurred after the company took €500,000 from the account in September 2016 to use as collateral to an outside party. As a result, the account contained only €684,205 on 31 October. It should have contained €1,198,769 – a shortfall of €514,564. An independent auditor found an additional shortfall of €538,494 on that same date.

The regulatory measures were lifted several weeks later by Decision No. 2016-P-101 of 29 December 2016, after the violation was resolved. In the meantime, all business activities had ceased. A payment company barred from debiting its segregated account cannot make payouts to its customers. Thus, it can no longer function.

There are three lessons to be learned from this case study:

• Segregated accounts are not fund reserves
  The fundamental error was treating the segregated funds as an asset that could be used at any time. In this case, they were used as collateral to an outside party. This is specifically prohibited under Article L 522-17 of the Monetary and Financial Code. Segregated funds do not belong to the business and cannot be used as collateral, liquidity, or financial leverage.
  
• Operational consequences can be immediate
  The ACPR immediately barred debits from the account, which ceased operations. For a platform, this means vendors go unpaid and customers are blocked without notice.
  
• Audits can come from within
  The shortfall was discovered by an independent auditor who was required to notify the ACPR. The daily reconciliation between the amount segregated and the customer balance serves as a checkpoint that makes it impossible to hide discrepancies for an extended period.
  

How do marketplaces set up segregated accounts?

Typically, marketplaces do not open segregated accounts themselves. Instead, they hire an authorised payment service provider to collect funds. The provider is responsible for the account and regulatory requirements. Implementation involves more than simply opening a business bank account. The marketplace must determine its requirements, decide who will be responsible for segregation, verify its provider, and examine its contracts.

Below, we outline the five steps required to open a segregated account.

Determine requirements

If the platform receives or holds funds before paying them out to the seller, it makes payments on behalf of third parties. Therefore, funds must be protected, typically using a segregated account. If customers pay sellers directly, this obligation does not apply.

Decide who is responsible for segregation

There are three models of segregation. Marketplaces can become authorised as payment institutions and fulfil the obligation themselves. They can become agents of authorised providers responsible for the obligation. Lastly, they can outsource collections entirely to authorised providers. The last option is the most common.

If collections are outsourced, the marketplace transfers responsibility while maintaining control of the experience using a provider’s application programming interface (API). The option a marketplace chooses depends on its sales volumes and roadmap and whether it wants to handle regulated operations internally.

Verify providers

Marketplaces must ensure that their provider is actually authorised to provide payment services in France. They can do so by checking the ACPR’s Register of Financial Agents.

In addition to basic verifications, marketplaces need to consider three features in a provider. First, they need to consider how the provider protects funds (i.e., segregation or insurance) and their documentation for doing so. Next, marketplaces need to consider the robustness of the provider’s internal audits and daily reconciliations. Lastly, they can consider the strength of the provider’s money laundering and anti-terrorism measures, which determines how easily sellers can be onboarded.

Examine the contract

Marketplaces need to carefully examine clauses on the reversibility and portability of seller balances if a provider changes. They can also consider payout times, procedures for failed and disputed payments, and statuses of funds and payment accounts if a contract is terminated.

Inform sellers

The general conditions of sale and seller contracts need to explain where funds are held, who holds them, when they are paid out, and why some payments are withheld. This transparency helps prevent disputes by sellers who don’t understand why their funds exist but aren’t available to them.

How Stripe Connect can help

Stripe Connect orchestrates money movement across multiple parties for software platforms and marketplaces. It offers quick onboarding, embedded components, global payouts and more.

Connect can help you:

• Launch in weeks: Use Stripe-hosted or embedded functionality to go live faster and avoid the up-front costs and development time usually required for payment facilitation.

• Manage payments at scale: Use tooling and services from Stripe so you don't have to dedicate extra resources to margin reporting, tax forms, risk, global payment methods or onboarding compliance.

• Grow globally: Help your users reach more customers worldwide with local payment methods and the ability to easily calculate sales tax, VAT and GST.

• Build new lines of revenue: Optimise payment revenue by collecting fees on each transaction. Monetise Stripe's capabilities by enabling in-person payments, instant payouts, sales tax collection, financing, expense cards and more on your platform.

Learn more about Stripe Connect or get started today.

FAQs about segregated accounts in France