UK fintech firms forced to suspend services after Wirecard collapse
Reuters
Published Jun 26, 2020 12:27PM ET
By Iain Withers and Anna Irrera
LONDON/NEW YORK (Reuters) - Customers of several British digital finance companies were unable to make payments or access their money on Friday after the collapse of German payments firm Wirecard caused disruption across borders.
Wirecard's implosion on Thursday, owing creditors almost $4 billion, led Britain's Financial Conduct Authority to impose restrictions on the company's UK unit.
That in turn forced firms that had been relying on Wirecard services to temporarily suspend their own, leading scores of customers to complain on social media about losing access to vital services - and money.
"Is my money safe? When can I get it back? Won't let me withdraw or pay a supplier. What the hell is going on???" tweeted a customer of business account provider ANNA.
"It's awful I need my money as due to reopen my business next week," said another ANNA customer.
ANNA said in a statement that it had had to temporarily suspend customer cards and accounts and was working to restore services as soon as possible.
Card provider Curve said it had seen a temporary disruption to services and advised customers to use alternative payment methods, while account provider Pockit told its customers accounts would be inaccessible for a short period and it was working with the FCA to find a solution.
The FCA said so-called safeguarding rules protect and return customer money if a firm were to fail.
"Wirecard is required under the Electronic Money Regulations to maintain appropriate measures to safeguard customers' money," the UK financial watchdog said.
Sarah Kocianski, head of research at fintech consultancy 11:FS, said the knock-on effects of Wirecard's collapse posed a big test for digital firms that often rely on backend services provided by bigger players.
"This could rebound not only on the companies in question, but also on the wider fintech industry as consumers question the newer providers they have recently adopted in large numbers."
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.