The bankruptcy of the Dax group Wirecard also hits the most important subsidiary Wirecard Card Solutions hard: The British financial regulator FCA initially prohibits it from doing business. The agency now has positive news for the financial service provider's customers.
The British financial regulator FCA has lifted the restrictions for the domestic Wirecard subsidiary. The FCA said that it had been ensured that Wirecard Card Solutions could meet certain conditions. "From now, or very soon, customers will be able to use their cards as usual." The authority had de facto prohibited the Wirecard subsidiary from doing business after the parent company's insolvency. As a result, customers were unable to access their money.
Some start-ups use Wirecard to offer their services. Therefore, the FCA ban hit her hard. Wirecard said on Saturday that it would discuss measures with the authorities to hopefully continue operations. In Germany, numerous services are provided by Wirecard Bank, which, unlike the parent company, has not previously filed for bankruptcy.
If the German financial regulator Bafin imposes a so-called moratorium and thus prohibits the bank from making payments, this would hit hard on some customers. Finally, Wirecard uses the bank to process credit card payments for many companies. Switching to another provider should take several weeks, as long as customers at the merchant can no longer pay by credit card – unless the merchant also uses other payment service providers. In Germany, start-ups also use the Wirecard Bank for their services.
Bafin has appointed a special representative at Wirecard Bank to monitor the institution's cash flows and to partially prevent them. If that is not enough, the authority could impose a moratorium at any time. In other cases, such a step was often followed by bankruptcy. Wirecard has long since met this fate: the Dax group applied for bankruptcy last week because the balance sheet lacked 1.9 billion euros.
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