Wirecard files for Insolvency yesterday.

GerardKeating

Wirecard files for Insolvency yesterday..

This follows relevations last week of a €1.9 billions in fake Filipino bank accounts.

Customer funds frozen at Wirecard UK after FCA steps in

Pacifico

Curve cards suspended :eek:

GhostyMcGhost

Statement from Curve this morning which was shafted by the collapse of Wirecard. Should be back up and running in a few days

WIRECARD LICENCE SUSPENDED - PLEASE CARRY A BACK-UP CARD.

Dear Curve Customers,

Your Curve card and all associated Curve transaction and money transfer services will be temporarily suspended with immediate effect.Please be assured, we expect to be up and running again shortly but it may take a few days. Your money and card details held at Curve are safe and secure.

This has happened because the Financial Conduct Authority has this morning suspended its permission for Wirecard Card Solutions Limited (the company who currently issues Curve Cards) to operate, without prior notice. This action is not related to Curve - but Curve currently depends on Wirecard for operation of the Curve card.

We are already well on the way to migrating away from Wirecard but have not fully completed this process. We are now working round the clock to achieve the migration as quickly as possible and therefore expect this disruption to last for only a limited period of time.

We will continue to communicate the details of what this means for you during this interim period.

For now, please carry a backup card.

We’ll be back,
Team Curve

Delta2113

That was some curveball thrown at Curve from Wirecard. They didn't see that coming.

Curve out off action for at least a few days.

ongarite

Timeline of Wirecard financials.
Its like the Enron of fintech.
https://www.ft.com/content/284fb1ad-ddc0-45df-a075-0709b36868db

Also believed to be involved in large hack for hire where people critical of company were harassed and cyber-stalked.
https://www.ft.com/content/315aceba-935a-4e70-83c4-1d1fd7cf939b

I dont get what they do?

Curve cards are mastercard so is it not mastercard who look after the processing etc in the background for curve?

GerardKeating

As of this afternoon, any/all Visa cards issues by wirecard will be declined for authorisations. This will include prepaid cards. Not sure about Wirecard/Mastercard yet, but i assume they gone as well

GerardKeating

Raphael Elegant Tool wrote: »

I dont get what they do?

Curve cards are mastercard so is it not mastercard who look after the processing etc in the background for curve?

Curve do not actually issue credit cards (yet), Wirecard issued them for Curve.

According the the Website, the now discontinuted An Post currency cards were issued by WireCard

Yggr of Asgard

Any card issued by Wirecard Card Solutions Ltd (“WDCS”) has stopped or will stop working.

As they were the predominant issuer for most Fintech companies this is going to hurt a lot of customers.

Yggr of Asgard

Raphael Elegant Tool wrote: »

I dont get what they do?

Curve cards are mastercard so is it not mastercard who look after the processing etc in the background for curve?

Curve is not a member of Mastercard not do they they a license from Mastercard to issue cards themselves.

So they needed a provider to interface between their system and Mastercard which in this case was Wirecard Card Solutions Ltd (“WDCS”).

This is similar to Revolut in the early days before they issued the cards directly for some off their customers.

Most Fintech companies do it this way before they get a bank license or are big enough to issue their own cards.

GerardKeating

Around 50,000 An Post currency cards suspended.


https://www.rte.ie/news/business/2020/0626/1149935-an-post-currency-card-suspened/

Darc19

Delta2113 wrote: »

That was some curveball thrown at Curve from Wirecard. They didn't see that coming.

Curve out off action for at least a few days.

They did.

They announced in April that they were migrating to a new payment partner and this would take effect from June 28th.

So of all the companies affected, curve will be first back operating


Liffey Valley / blanchardstown gift cards, me2you gift cards and many others are suspended too.

un5byh7sqpd2x0

GhostyMcGhost wrote: »

Statement from Curve this morning which was shafted by the collapse of Wirecard. Should be back up and running in a few days

It’ll be more than a few days... They need to find a new provider and new cards will need to be issued I suspect.

The J Stands for Jay

Curtis Deep Gravel wrote: »

It’ll be more than a few days... They need to find a new provider and new cards will need to be issued I suspect.

They started the work a few months ago.

Thargor

Are those one4all cards safe does anyone know? We get little bonuses at work paid for in them so I have a few hundred to get rid of...

Sheep Shagger

Thargor wrote: »

Are those one4all cards safe does anyone know? We get little bonuses at work paid for in them so I have a few hundred to get rid of...

Yeah safe enough but like all gift cards whether they are these or a specific retailer, you should try to use as quickly as possible, you never know what company is going to go bust next.

Darc19

Thargor wrote: »

Are those one4all cards safe does anyone know? We get little bonuses at work paid for in them so I have a few hundred to get rid of...

One4all didn't use wirecard so no affect there.

Me2you did use wirecard and currently can't be used, but all funds are safe.

Unless a card was issued directly by and operated by wirecard, funds should be fine as I would guess the same system operated by Me2you was used by others - money is held in a separate account and drawn down electronically by wirecard as and when used.

Jim2007

Thargor wrote: »

Are those one4all cards safe does anyone know? We get little bonuses at work paid for in them so I have a few hundred to get rid of...

The funds should be fine, it is the mechanism to access them that has failed.

Jim2007

Raphael Elegant Tool wrote: »

I dont get what they do?

Curve cards are mastercard so is it not mastercard who look after the processing etc in the background for curve?

Mastercard and VISA are like McDonalds - some of the business they run directly themselves and some of it is let's say "franchised like a restaurant" in which case others may make the decisions on issuing cards, credit limits and underwriting of limits or do the primary processing for the card and so on.

Darc19

Jim2007 wrote: »

Mastercard and VISA are like McDonalds - some of the business they run directly themselves and some of it is let's say "franchised like a restaurant" in which case others may make the decisions on issuing cards, credit limits and underwriting of limits or do the primary processing for the card and so on.

No, they are payment facilitators.

They license their name and technology and don't issue any cards directly themselves.

So taking the McDonald's example, visa/mastercard supply the signs, the ovens, the menus, but the licencees organise the food and cooking

Delta2113

It is unlikely Curve will have to issue new cards to it's Customers.

Marcusm

Jim2007 wrote: »

The funds should be fine, it is the mechanism to access them that has failed.

“Should” is the right Word; my concern, based on their balance sheet, is that Wirecard has never had €1.9bn of cash once all client monies are excluded. To me, this suggests that there must be some concern about commingling. Hopefully FCA in the U.K. has been more effective in ensuring that the U.K. issuers funds were in a segregated third party account at a licensed EU bank. The “missing” money was described as successively at Singaporean and Filipino banks neither of which would have met the UK e-money issuer criteria for an acceptable bank.

Sheep Shagger

Marcusm wrote: »

“Should” is the right Word; my concern, based on their balance sheet, is that Wirecard has never had €1.9bn of cash once all client monies are excluded. To me, this suggests that there must be some concern about commingling. Hopefully FCA in the U.K. has been more effective in ensuring that the U.K. issuers funds were in a segregated third party account at a licensed EU bank. The “missing” money was described as successively at Singaporean and Filipino banks neither of which would have met the UK e-money issuer criteria for an acceptable bank.

They provide the infrastructure only, they do not hold the money.

Marcusm

Sheep Shagger wrote: »

They provide the infrastructure only, they do not hold the money.

The position is not so simple as that. An e-money institution is required to place the money with a short list of entities (principally an EU licences bank or central bank) in a third party account. U.K. insolvency rules provide that the general creditors don’t have access to that money but that it is segregated for the cardholders. The problem I’m anticipating is that based on most recent financial statements and the undisputed press reports of the amount which is unaccounted for (€1.9bn), some or all of that money cannot be with third party banks. My suspicion is that it might have been placed with Wirecard Bank AG which in turn sent it to Asia if that’s where it went. Counterparty and concentration risk limits should have limited the amount placed with a single bank. The UK card issuer is not regulated for such matters but the overall group should be as there is a regulated EU bank in the group. The assertion that a prudently run institution would have such an exposure to Filipino banks should have raised serious concerns.

Eventually, I suspect that Germany will settle all claims whether covered by deposit guarantee or not because of the very poor oversight.

Jim2007

Marcusm wrote: »

The position is not so simple as that. An e-money institution is required to place the money with a short list of entities (principally an EU licences bank or central bank) in a third party account. U.K. insolvency rules provide that the general creditors don’t have access to that money but that it is segregated for the cardholders. The problem I’m anticipating is that based on most recent financial statements and the undisputed press reports of the amount which is unaccounted for (€1.9bn), some or all of that money cannot be with third party banks. My suspicion is that it might have been placed with Wirecard Bank AG which in turn sent it to Asia if that’s where it went. Counterparty and concentration risk limits should have limited the amount placed with a single bank. The UK card issuer is not regulated for such matters but the overall group should be as there is a regulated EU bank in the group. The assertion that a prudently run institution would have such an exposure to Filipino banks should have raised serious concerns.

You are completely missing the point. Wirecard provide the transaction processing infrastructure only, nothing else, they are not a financial institution of any kind and they have no access to client funds. It is a simple as that.

There is not missing money because it never existed anywhere but in their balance sheet. And most likely was the necessary debit to cover the supposed pumping of third part sales through their revenue stream. But we'll have to wait for the details on that.

Marcusm wrote: »

Eventually, I suspect that Germany will settle all claims whether covered by deposit guarantee or not because of the very poor oversight.

BaFn had no obligation to supervise them as they were not a financial institution.

Marcusm

Jim2007 wrote: »

You are completely missing the point. Wirecard provide the transaction processing infrastructure only, nothing else, they are not a financial institution of any kind and they have no access to client funds. It is a simple as that.

There is not missing money because it never existed anywhere but in their balance sheet. And most likely was the necessary debit to cover the supposed pumping of third part sales through their revenue stream. But we'll have to wait for the details on that.



BaFn had no obligation to supervise them as they were not a financial institution.

I am not missing the point. Money which is paid into a Wirecard “card” is placed in an account in Wirecard’s name. See pages 15 and 16 of the 2018 financial statements for Wirecard Solutions Ltd available on companieshouse.gov.uk (for free, https://beta.companieshouse.gov.uk/company/07875693/filing-history ). Wirecard recognises both an asset (cash) and liability (to customer) of £465.69m. This is independent of the money which passes through it in its merchant acquiring business. The question is where has this cash been deposited and, personally, I find the disclosures poor when compared with what I have seen from other e-money issuers.

You are correct that BaFin does not regulate the card issuer (UK company Wirecard Solutions Ltd) but it does directly regulate its sister sub Wirecard Bank AG and their ultimate parent, Wirecard AG, while not directly regulated by BaFin (until 2021) should have been subject to significant oversight given its importance to the regulated entity. (By contrast, BaFin would be unlikely to exercise any significant oversight of Volkswagen AG by reason of its ownership of Volkswagen Bank GmbH as the relative significance is different.)

Wirecard Bank AG has approx €1.2bn of customer deposits (with German g’teed for the relevant portion). Together these form a significant part of the overall gross assets (€3.5bn) and if €1.9bn is unaccounted for, it is not difficult to see that “should be fine” is about as strong as you can go (agreeing with you).

The issue is that the card issuer is not prudentially regulated in the U.K., only for conduct. If it placed all the customer deposits with Wirecard Bank AG then it probably meets the minimum conduct threshold but I for one would not be happy.

Marlow

Ok ...

Curve is back on track tomorrow .. and no new cards needed.

Mail send to all customers tonight and update on the blog: https://discover.curve.app/a/wirecard-whats-happened-what-it-means-and-how-were-fixing-it

/M

Marcusm

Marlow wrote: »

Ok ...

Curve is back on track tomorrow .. and no new cards needed.

Mail send to all customers tonight and update on the blog: https://discover.curve.app/a/wirecard-whats-happened-what-it-means-and-how-were-fixing-it

/M

Curve was always going to be a safer/no loss matter as it doesn’t involve preloading the “card” with cash and so there’s no money at risk. The prepaid/preloaded cards involve an immediate transfer of cash from your bank account to the card providers account hence the risk (which should be moderate if the rules are adhered to).

Marlow

Marcusm wrote: »

Curve was always going to be a safer/no loss matter as it doesn’t involve preloading the “card” with cash and so there’s no money at risk.

Well .. the maximum loss would have been, whatever is in the cashback balance, but yes, they're a completely different approach to most of the others.

Funnily enough, the 3 cards I have beyond Curve, that would be considered fintech are all not using Wirecard services. Well, Revolut did, but had a plan B in place to begin with.

/M

vectorvictor

Jim2007 wrote: »

You are completely missing the point. Wirecard provide the transaction processing infrastructure only, nothing else, they are not a financial institution of any kind .

It's just not the way it works in reality though. Anna in the UK said this


All funds in the Barclays account belong to ANNA customers and cannot be used for any other purposes. Although the account was officially attributed to Wirecard Card Solutions, ANNA had visibility of the Barclays account prior to the FCA suspension, and we saw no unusual activity

Then in their YouTube Q and A they admitted the visibility was "partial" and "limited".

Fintechs are going to take a credibility hit here regardless of the eventual outcome. They fought hard to establish credibility but the average customer is going to see nought safer than the high street incumbents I think

Marlow

vectorvictor wrote: »

Fintechs are going to take a credibility hit here regardless of the eventual outcome. They fought hard to establish credibility but the average customer is going to see nought safer than the high street incumbents I think

Well .. lets say it like this: those Fintechs, who actually are going all the way to get a banking license .. like N26 and Revolut .. are certainly going to see a lot more business than the ones, who are purely working of an eMoney license.

Revolut certainly has shown, they were ahead of the curve (no pun intended) and has a plan B to action the second this happened (they were still using Wirecard for some services, but had alternatives and could change without visible outage).

N26 has been established as a bank for a good while.

And well, Curve ... did see the storm front coming in and had been in the progress .. they just got caught on the outriggers of it .. tumbled about and back on track.

I mean .. they did better than Ulster Bank, NatWest etc. did in their disaster. You DO NOT want to use a high street bank. If something like this hits them, they're out for weeks. And Ulster Bank managed to do it twice. To themselves.

Danske Bank and Halifax will certainly never get a foot on the ground in Ireland ever again after the stunt they pulled here. If you think above is bad ... those two were high street bank examples, that put people (and businesses) in much worse situations. There is a reason, that Fintech institutions are so popular.

/M