Wirecard Resumes Operations In The UK After FCA Lifts Restrictions
The United Kingdom’s Financial Conduct Authority (FCA) announced that they had given Wirecard permission to go back to its regulated activities, as they have already presented written consent. It was midnight of June 30 when the payments company was able to return electronic money and payment services to its clients.
Why was Winecard shutdown?
The FCA stated that it had granted Wirecard Card Solutions, Wirecard’s U.K. subsidiary, written consent to recapitulate e-money as well as payment services. However, there will still be some restrictions that will remain. The U.K.’s watchdog had obligated the firm to stop its procedures on June 26 after its parent company filed for bankruptcy in Germany.
Now, thousands of Brits are able to access their money once again after being barred from the company’s services related to financial technology. The shutdown struck a few fintech start-ups, like Anna, Curve, Pockit, and U Account of Morses Club. Curve, however, had succeeded in getting around the constraints by quickly changing its payments processor.
Fintechs might lose the trust of their customers
Even though the restrictions have already been relaxed by the FCA, specialists have said that the controversy could still leave lasting damage on the trust of the people when it comes to fintech companies. Curve, Anna, and other similar apps bank on e-money licenses to manage payments but don’t have their own banking licenses to keep the funds of their customers. Instead, they ringfence the cash to third-party banks.
Wirecard Munich has declared that it will proceed with its operations despite opening bankruptcy proceedings. The firm fell into bankruptcy after unveiling a 1.9 billion euro ($2.1 billion) dent in its balance sheet. After being detained in Munich, former CEO Markus Braun is now out on bail.
The company has guaranteed that it is investigating whether or not subsidiaries will have to pass an application for bankruptcy as well. Wirecard’s North America branch, which the company had acquired from Citigroup in 2016, announced that it was already on the lookout for a buyer.
Wirecard is still in trouble
Meanwhile, if we go to Singapore, their central bank has made a statement that Wirecard is evaluating its capacity to continue rendering services in the country after its parent company filed for bankruptcy. Wirecard’s Singapore branch found itself in the middle of the probe in accounting infringements last 2019. The Monetary Authority of Singapore is currently working with law enforcement to examine the local operations of Wirecard.
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