FCA lifts restrictions on Wirecard Card Solutions

via FinTech Futures

The Financial Conduct Authority (FCA) has lifted restrictions on Wirecard Card Solutions, allowing the payments firm to resume activities.

The FCA announced on 29 June that the UK subsidiary of the beleaguered German firm was able to “meet certain conditions.”

It adds: “This means customers will now, or very shortly, be able to use their cards as usual.”

Wirecard’s UK subsidiary is still unable to transfer its own assets. The FCA also maintains controls on where the firm can hold customer cash.

“We apologise for the inconvenience to our valued customers that the temporary suspension caused,” Wirecard Card Solutions says in a statement.

“There may be a delay before all card programmes are fully operational, so some customers could find themselves unable to transact immediately but we anticipate this lasting no longer than 24 hours.”

The news means that several UK fintechs will be able to switch the lights back on for their services. Many were caught out last week when the FCA ordered Wirecard UK to cease all activities.

Those affected include Curve, ANNA, Pockit, Dozens, Soldo and Revolut. Revolut and Curve shifted to secondary systems, the latter doing so over the weekend.

ANNA, a mobile business account provider with roughly 20,000 customers, ordered customers to withdraw money as soon as possible.

Co-CEOs Boris Dyakonov and Eduard Panteleev offered their own money to refund customers in case the FCA failed to lift restrictions.

“In the first few days, while the Wirecard UK is getting back to normal we would urge anyone who can afford to not to make any payments,” Dyankonov and Panteleev write on the company blog.

Insolvency for Wirecard

The FCA’s order came less than 24 hours after Wirecard filed for insolvency in Germany. The firm sank beneath the weight of an accounting scandal worth €1.9 billion.

The filing occurred after EY, Wirecard’s auditor for over a decade, refused to sign off the 2019 accounts.

That refusal forced out chief executive Markus Braun and lead Wirecard to admit that $2.1 billion of its cash likely didn’t exist. Braun is on a €5 million bail following an arrest on suspicion of falsifying accounts.

Amidst the turbulence, Wirecard North America is seeking acquisition, coordinating the sale through an investment bank.

“Wirecard North America’s cardholders and client funds remain safe and protected at well-capitalised US and Canadian partner banks,” the company writes in a release.

These banks include Sunrise Banks, Fifth Third Bank, and Peoples Trust Company. Relationships with issuing banks and vendors will also “continue to be sustained and operated without any disruption.”

Seth Brennan, managing director of Wirecard North America, says the firm has a “strong, independent cash flow and financial position.”