Wirecard Card Solutions Limited (FRN 900051) is authorised and supervised by the FCA to issue e-money and provide payment services including, issuing e-money onto prepaid cards. Wirecard is authorised under the Electronic Money Regulations 2011 (the EMRs) and its activities are also subject to requirements under the Payment Services Regulations 2017 (the PSRs).
On 26 June 2020, the FCA imposed a number of requirements on Wirecard including, that the firm:
- must not dispose of any assets or funds
- must not carry on any regulated activities
- must set out a statement on its website and communicate to customers that it is no longer permitted to conduct any regulated activities.
This follows publication to the FCA’s Register of a number of requirements which have been applied to Wirecard’s authorisation from 19 June 2020. The full requirements have been published to the FCA Register.
There are ongoing events in Germany concerning companies closely linked to Wirecard. Wirecard’s parent company, Wirecard AG based in Germany is currently the subject of law enforcement interest and insolvency proceedings. Wirecard AG is not supervised by the FCA.
Why did the FCA take this action now?
The FCA is the UK’s designated competent authority, responsible for granting firms based in the UK, permissions to undertake e-money activities and payment services and, it is within the FCA’s power to take supervisory action in certain cases to protect the interests of a firm’s customers. Under the EMRs, the FCA may impose such requirements as it considers appropriate which may require a firm to (a) take a specified action; or (b) refrain from taking a specified action. These types of requirements are known as ‘Own Initiative Requirements (OIREQ)’.
Our primary objective is to protect the interests and money of consumers who use Wirecard. Following last week’s news of €1.9 billion missing from the accounts of the German company, Wirecard, we immediately placed requirements on the firm’s UK business so that it should not pay out or reduce any money it holds for its customers except on their instructions. We have been working closely with Wirecard UK and other authorities over the past few days to take action that protects consumers. We are continuing to do this and on 26 June, we took additional measures to require the firm to cease all regulated activities in order to further protect customer money. This now means customers money cannot be accessed.
What should I do if I have e-money with Wirecard, use Wirecard to make payments or my prepaid card has stopped working? Who do I contact?
Customers should contact their card provider directly and may do so using the contact details on their website.
Customers can also contact our Consumer Helpline for further information.
What should I do if I gave money to an agent of Wirecard?
E-money firms like Wirecard may provide payment services through agents. An agent is any person (this can be an individual or a company) who provides payment services on behalf of an e-money firm. E-money firms may also appoint distributors to distribute or redeem e-money but distributors cannot provide payment services. Unlike agents, there is no requirement to register distributors and agents are published to the FCA’s Register. Where e-money firms appoint agents or distributors they are responsible for anything done by an agent or distributor.
Customers should contact their card provider or Wirecard directly if they are concerned, have any questions or for any updates.
What should I do if I gave money to an agent of Wirecard which is based in another EEA country?
An authorised e-money firm, like Wirecard, may provide payment services or e-money activities in another European Economic Area (EEA) country. This is called ‘passporting’. Passporting when a business carries on activities and services regulated under EU law in another EEA country on the basis of authorisation or registration in its home country. The activities may be carried out in the host country using a branch or a local agent / distributor or, on a cross-border services basis without a physical presence in the host country for example, a website.
Wirecard is passporting its services into all EEA countries and has established some agents and distributors in those countries. If a customer has given money to an agent or distributor of Wirecard which is based in another EEA country, they should contact Wirecard directly.
The account where I receive my benefit payments has been frozen, what do I do?
The FCA has been working with the Department of Work and Pensions (DWP) to arrange help for affected consumers. Please refer to the DWP (link is external) for support.
I am experiencing financial hardship as I can’t access money (for example, my salary) that’s been paid onto my card. What should I do?
If you’re struggling to pay for essentials you might be able to get help from a local welfare assistance scheme.
They vary from area to area and can provide, for example, vouchers, pre-payment cards, furniture or white goods and food banks.
Some local authorities might also give loans.
- If you live in England, find your local welfare assistance team using this interactive map on the Children’s Society website (link is external).
- If you live in Scotland, find out more about the Scottish Welfare Fund on the Scottish Government website (link is external).
- If you live in Wales, find out about the Discretionary Assistance Fund for Wales(link is external).
If you live in Northern Ireland you might be eligible for Finance Support. Find out more on the nidirect website(link is external).
Are my funds protected by FSCS?
No. The Financial Services Compensation Scheme (FSCS) only applies to certain types of activity which does not include issuing electronic money or payment services.
Under the EMRs and PSRs, there are rules on how customers’ money should be protected and these requirements are known as ‘safeguarding’.
Is there a chance I won’t get my money back? What is safeguarding?
Safeguarding is a key consumer protection measure within the EMRs and the PSRs. The purpose of safeguarding is to protect and return customer money if a firm was to fail.
Wirecard is required under the EMRs to maintain appropriate measures to safeguard customers money. It does this by holding it separate from its own money in accounts with banks (or another credit institution). Effective safeguarding arrangements are critical to help ensure that customers’ money is protected and returned if a firm fails. Adequate safeguarding arrangements which are compliant with the regulatory requirements are a condition of Wirecard’s ongoing FCA authorisation.
What should I do if I am a firm who outsources some operational functions to Wirecard?
Firms should contact their relevant Supervision contact to discuss the contingency plans they have in place. We have a dedicated Customer Contact Centre to give your firm a direct point of contact, email Firm.Queries@fca.org.uk
To note, we are currently consulting on new requirements on the firms we supervise to help strengthen their operational resilience including, the implications for operational resilience for firms using outsourcing and other third-party service providers. We would also draw your attention to the EBA Guidelines on Outsourcing Arrangements which apply to e-money and payment firms.
What happens next?
The FCA has published requirements to the Register in respect of Wirecard and continue working with the firm to progress these matters.
Holvi Mastercard temporarily suspended due to Wirecard insolvency
Holvi Mastercard has been temporarily suspended due to recent events in connection with the insolvency of Wirecard AG
How did this happen?
The UK Financial Conduct Authority (FCA) has suspended service for Wirecard Card Solutions Ltd (WDCS) earlier today. WDCS is a subsidiary of Wirecard AG and issues the Holvi Business Mastercard. This decision was taken by the FCA without any prior notice.
What does this mean for you?
All other functions of your Holvi account are still fully available. You can still invoice, receive and transfer funds. Please be assured that all Holvi customer accounts and funds remain safe, secure and accessible at all times – no Holvi accounts have been impacted by this event. This is because all Holvi customer funds are segregated and held in separate accounts in European banks in Finland, Sweden, Denmark, the UK and France.
No customer funds are held by Wirecard AG. Your money and Holvi account are safe.
Your trust is our top priority. We’re actively working on a solution and will continue to update as soon as possible.
Wirecard : Informs Clients & B2B Partners about current Business Operations
As announced on Thursday, 25 June 2020, the Management Board of Wirecard AG has filed an application for opening of insolvency proceedings on behalf of Wirecard AG with the competent Munich Local Court. With the filing of the insolvency application, Wirecard’s business activities will be continued. The Management Board is of the opinion that continuation is in the best interests of the creditors.
As a first step, the court has commissioned the Munich lawyer Dr. Michael Jaffé as an official expert. Whether insolvency proceedings will be opened is still under review. The Management Board of Wirecard AG expects a provisional insolvency administrator to be appointed for Wirecard AG shortly.
The business operations of the Group companies (https://www.wirecard.com/contact/worldwide) including the licensed units are currently ongoing. The parent company performs some central functions for the subsidiaries. As previously reported, it is being continuously reviewed whether insolvency applications also have to be filed for subsidiaries of the Wirecard Group. With the exception of a small development branch office, no insolvency applications have been filed by Group companies at present.
Wirecard Bank is currently not part of the insolvency proceedings. the electronic funds transfer of Wirecard Bank are not affected. Payouts to merchants of Wirecard Bank will continue to be executed without restrictions. Further information on Wirecard Bank AG can be found at wirecardbank.com. The licensed legal entities, and where appropriate, Wirecard AG, remain in close contact with the respective regulators. Furthermore, we are in constant contact with the credit card organizations.
Wirecard Card Solutions Limited, headquartered in Newcastle, UK, has suspended its business operations due to an order issued by the competent supervisory authority, Financial Conduct Authority. The company has discussed measures with the authorities. The measures are being undertaken and will hopefully enable it to continue operations.
The TPA business in question is still under review. The newly appointed CEO of Wirecard AG, James H. Freis, Jr., took a new approach to investigating the known allegations immediately upon taking office. Among other measures, a number of new advisors were commissioned to ensure neutrality and, in particular, independence from the former Management Board members of Wirecard AG. The clarification efforts will, of course, continue even after the filing of the application for the opening of insolvency proceedings.
Tel.: +49 (0)89-4424-1424
Bloomberg: WDI GY
Deutsche Bank is considering taking over Wirecard Bank
At the beginning of the week it still looked as if Wirecard’s Bank would also go into bankruptcy because too much customer money had meanwhile flowed out – now it is becoming clear that Deutsche Bank could take over in whole or in part. The Bank is examining possible financial aid in coordination with BaFin, the insolvency administrator of Wirecard AG and the management board of Wirecard Bank, a spokesman said.
According to German media reports, at least one financial investor has also expressed an interest in Wirecard Bank.
The financial supervisory authority Bafin had appointed the Bundesbank as a special representative at Wirecard Bank, who should ensure that no funds flow to Wirecard AG and that business continues.
Wirecard Bank has a full banking license and can offer all financial services. Since the beginning of the year, it has been promoting 0.75 percent interest on checking deposits on the “Boon Planet” banking app, while other institutes hardly pay any interest or even charge fees for fixed deposits.
If the bank had gone bankrupt, the deposit guarantee fund of the private banks would have compensated customers who did not withdraw their money on time.
On the balance sheet, Wirecard Bank is not a heavyweight. According to internal sources, at the end of March it had total assets of 1.6 billion euros, which roughly corresponds to a medium-sized savings bank. The equity at the end of the quarter was 205 million euros and he bottom line was a surplus of 4.7 million euros at the end of the quarter, after 40.8 million in the same quarter of the previous year.
What motives drive Deutsche Bank is still unclear. “We are one of the largest banks in the payment traffic worldwide and that is one of our strengths, a real core business area,” Deutsche Bank board member Fabrizio Campelli told Handelsblatt in an interview published on Friday and “if there are opportunities to strengthen ourselves, we will look at them.”
Deutsche Bank may be targeting Wirecard Bank’s corporate customers in payment transactions, although the first have already turned away. Since the beginning of July, for example, the discounter Aldi Süd has no longer processed credit card payments through the insolvent payment service provider, but through the provider Payone, as the company explained on Thursday.
The cooperation with Wirecard Bank has since been limited to business with the Aldi gift card. But this has no consequences for customers.
The connections between Wirecard and Deutsche Bank are complex anyway. Last year, on the initiative of the Wirecard Group, there were even informal merger talks with Deutsche Bank, which, however, broke off quickly as Bloomberg news agency reported first. In addition, the bank temporarily granted company founder Markus Braun a private loan of EUR 150 million secured with Wirecard shares.
In addition, one of the auditors, who was responsible for checking the Wirecard balance sheet at EY in 2017, switched to Deutsche Bank in 2018 as chief accountant.
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