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Wirecard’s Merchant Cash Advance Scam in Brazil & Turkey


In November 2018 Wirecard claimed it had launched a new Merchant Cash Advance (MCA) Product and in both May and June 2019, Wirecard told analysts that at least 33% (€133M) was in Turkey and Brazil. Earlier statements in March, and May, have repeatedly said that the bulk of the programme is in Brazil, with some also in Asia and Europe. In August 2019, Wirecard mis-remembered their earlier statements, and told analysts that they had previously stated MCA was less than 33% in Brazil and Turkey. Overall lending shrank to €370M.

We have seen Wirecard’s own accounts for both Brazil and Turkey. In both countries, MCA lending would appear negligible or non-existent. And in Turkey, it’s illegal, suggesting if there is any MCA lending, this is a separate problem in itself. More details for both Brazil and Turkey are available. But at its simplest, any firm with a meaningful MCA programme would see this reflected on the balance sheet as significantly more receivables than payables at any given moment and neither Brazil nor Turkey have anything like this.

As of 31 December 2019, the outstanding balance in the Wirecard Brazil FIDC (Wirecard’s regulated receivables fund) was R$32.3M. This translates to about €7.2M. In fact, this number has been fairly consistent for months. In 2018, when Wirecard first claimed to be pre-funding receivables in Brazil, this facility had not been set up. It does now exist, but lending volumes are very small.

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The lies keep piling up. There’s no meaningful MCA lending in Turkey, and what there is, is illegal. Similarly, there’s close to zero in Brazil. So where is this €133 million? Are they lying about it to mask a lack of cash flow?

Wirecard claims that at least 1/3 of its supposed €400M MCA program comes from Brazil and Turkey, with Brazil being the larger. Nonetheless, Wirecard is claiming that there is at least some meaningful lending, and subsequent revenue, from this business in Turkey.


Wirecard Turkey’s own audited (by Deloitte) financials shows that the MCA business there is tiny. As notable, in the entire report, there is not a single mention of MCA.

Illegal Lending in Turkey?

As it turns out, MCA lending is illegal in Turkey. View legal opinion showing wirecard’s mca product is illegal in Turkey.

Our work on the ground in Turkey suggests Wirecard are offering some small volumes of MCA to wireless carriers and mobile app vendors. The lack of disclosure in this audited report suggests they are misleading both Deloitte and the Turkish Banking Regulator (BRSA). Revenues and TPV in 2018 were only €2.4m / €61m which shows the business can only support tiny volumes of MCA – but this is not disclosed in the annual report.

We have informed the banking regulator in Turkey (BRSA) and we believe they will be looking into this imminently.

KPMG and the Supervisory Board

We have written several letters to the Wirecard Supervisory board highlighting our concerns and have called for the management board to be suspended to protect shareholder assets. Wirecard’s own filings confirm that management’s statements in 2018 and throughout 2019 about MCA were, and remain, false. KPMG and the Supervisory Board will easily see that in the accounts. But we reiterate our earlier question, “why are they misleading investors about MCA lending?” Our answer to this remains consistent: to hide something.

We believe Wirecard management are concealing a substantial overstatement of profits at CardSystems Middle East, Wirecard’s un-audited Dubai subsidiary, whose client transactions bear hallmarks of being fake/fraudulent. These dubious “clients” have contributed 58% of Wirecard AG profits in 2018.

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