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Wirecard or Weirdcard?

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Another day and another headline about Wirecard:

I’ve already shared lots of insight and discussion about the company, and the fact that The Financial Times did some great investigative reporting which brought to light a lot of the issues, whilst having their journalists hauled up in the German courts on criminal charges because BaFin was embarrassed.

Well, they’re even more embarrassed now that it comes to light that a lot of the company’s balance sheet was pure fiction and the CEO and founder has been arrested. But I took particular note of this headline …

… where the authors discuss the company's role in the foundations of Europe’s fintech world. The article is from Sifted, a new division of The Financial Times dedicated to fintech. In this article, Isabel Woodford rightly points out that most Wirecard customers are not customers of Wirecard in Germany:

There have been fears about possible disruption to Wirecard’s fintech clients — which include Revolut, Pockit, Soldo and Curve — who rely on the German tech-darling for card issuance, account top-ups and other e-money services. But it’s becoming clear that Europe’s fintechs face little direct upheaval, even in the event of Wirecard collapsing. This is because most fintechs clients operate under Wirecard Card Solutions (WCS) — an FCA-regulated, UK-based entity headquartered in Newcastle, rather than Munich-based Wirecard AG.

That hasn’t stopped Wirecard’s WCS competitors stepping into the fray however. For example, I saw a note from CEO and founder of Railsbank, Nigel Verdon, reaching out to say anyone worried about their relationship with Wirecard can have a chat …

And also got an email from a business development lead at another competitor saying:

I understand from a number of digital companies in my network that significant issues involving another payment provider are causing their customers to look for an alternative provider outside of the normal contract cycle.  I am not sure if you are in this situation but I thought it was worth reaching out to you …

Nothing like taking advantage of weakness in a situation is there? Mind you, probably a good idea as the FCA closed Wirecard Card Solutions this morning and froze all funds, effectively freezing Anna Money, Curve and other customers for a while too.

On 26 June 2020, the FCA imposed a number of requirements on Wirecard including, that the firm:

  • must not dispose of any assets or funds
  • must not carry on any regulated activities
  • must set out a statement on its website and communicate to customers that it is no longer permitted to conduct any regulated activities.

The issue I raise here is that I liked Wirecard, as they have powered so many innovators across Europe to unleash their dreams, and I applauded them for that.

However, there are three things wrong here. One is with Wirecard; a second is with Wirecard reporting; and the third is with the German regulator, BaFin.

The issue with Wirecard is they royally messed up and should be held accountable for it. Well done to The Financial Times for discovering and reporting their issues.

The second is that Wirecard is not a FinTech company. They are a bank behind FinTech firms. They have always been a bank and never been a FinTech, and they are regulated by BaFin, the German regulator, who also royally messed up. Shame on you BaFin for not admitting it.

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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