UK markets watchdog lifts restrictions on Wirecard

FILE PHOTO: The headquarters of Wirecard AG is seen in Aschheim near Munich
FILE PHOTO: The headquarters of Wirecard AG, an independent provider of outsourcing and white label solutions for electronic payment transactions is seen in Aschheim near Munich, Germany April 25, 2019. REUTERS/Michael Dalder/File Photo

June 29, 2020

By Huw Jones and Iain Withers

LONDON (Reuters) – Britain’s Financial Conduct Authority said late on Monday it would lift restrictions on German payments company Wirecard AG, allowing it to resume operations.

The markets watchdog imposed restrictions on the company’s UK unit after its collapse last week.

“We have been working closely with Wirecard UK and other authorities over the last few days to ensure that the firm was able to meet certain conditions required to lift the restrictions we imposed on it,” the regulator said. (https://bit.ly/2YHMxSX)

Several British fintech firms were forced to suspend services following the FCA’s restrictions on Wirecard, leaving hundreds of thousands of accounts blocked.

“Customers will now, or very shortly, be able to use their cards as usual,” the FCA said.

Wirecard said on Saturday it would proceed with business activities after filing for insolvency and an administrator was appointed on Monday.

Firms providing finance to poorer and vulnerable Britons who have difficulty accessing mainstream banking were among those hit, including Pockit and U Account, part of subprime lender Morses Club.

The government said anyone worried about not being able to receive welfare payments should contact its helplines.

Wirecard’s woes have forced some firms to accelerate existing projects to switch to other services, including card provider Curve which said on Monday its services were back online.

But industry forum Emerging Payments Association (EPA) warned it could take months for others to do the same and urged the FCA to lift its Wirecard freeze as soon as possible.

“We predict dozens of corporate failures, hundreds of job losses and significant reductions in tax payments, unless it is removed right away,” EPA said in a letter to the FCA.

Martin Lewis, founder of consumer website moneysavingexpert.com, said there was a reasonable expectation that consumers affected would get access to their money again by Wednesday or Thursday.

(Reporting by Huw Jones, Iain Withers in London and Ann Maria Shibu in Bengaluru; Editing by David Evans, David Clarke and Shounak Dasgupta)