The Financial Conduct Authority (FCA) has imposed a number of requirements on payment processor Wirecard.
Wirecard is a German payments company and its shares have fallen by more than 90% after the auditors from Ernst & Young had raised questions over cash balances worth €1.9bn last week.
The company has filed for insolvency with German regulators. In a brief statement on its investor relations page, Wirecard said: “The management board of Wirecard AG has decided today to file an application for the opening of insolvency proceedings for Wirecard AG with the competent district court of Munich (Amtsgericht München) due to impending insolvency and over-indebtedness.”
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After that, theFCA has imposed restrictions on Wirecard UK to cease all regulated activity and freeze all assets and funds.
“Our primary objective is to protect the interests and money of consumers who use Wirecard,” states the regulator.
“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. 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 customer’s money cannot be accessed.”
The banking services currently known to be suspended because of the Wirecard situation are: Curve, Pockit, U Account, McLear Ring, Crypto.com cards, Anna Money, CardOneMoney and Payoneer.
Curve, which allows people to use a single card to make payments from any of their bank accounts, told its 1.3 million customers to carry an alternative card because transactions and money transfer would not be possible as a result of the freeze.
Curve said Wirecard provided the infrastructure for its service, but did not hold any of its cardholders’ money.
Anna Money which offers a business account for startups and small businesses and depends on Wirecard to process payments, wrote to customers urging them to withdraw money as the FCA announcement was expected.
A statement on its website read: “We’re very sorry to say that your Anna card and account have been temporarily suspended with immediate effect. We expect the suspension to be lifted – the inability to use your account and card is temporal, and we are working to restore it as soon as possible. Your Anna card details and the money in your Anna account remain safe and secure – but unfortunately, you cannot currently access them.”
Read also: Wirecard says missing €1.9 billion probably does not even exist
Revolut used Wirecard only as an acquirer in certain locations, enabling customer card ‘top-ups’. “We were already in the process of a phased migration from Wirecard to diversify our suppliers since late 2019. When we learned of Wirecard’s problems, we migrated the remaining customers to alternative providers worldwide to avoid any potential service disruption.” said Revolut to Finextra.
