Wirecard assessing ability to continue offering payment services in Singapore: MAS

Wirecard North America is a separate legal and business entity of Wirecard. PHOTO: REUTERS

SINGAPORE - Payments firm Wirecard's local entities have informed the Monetary Authority of Singapore (MAS) that they are assessing their ability to continue providing services here after their parent firm in Germany filed for insolvency.

"Credit card payments at merchants using Wirecard's services, as well as usage of pre-paid cards issued by Wirecard, will be affected if it ceases operations here," MAS said in a statement.

Wirecard's main business activities in Singapore are to process Visa and Mastercard payments for merchants and help companies issue pre-paid cards.

MAS said it has informed Wirecard of its expectations that it promptly notify customers in advance of any disruption to its services.

"There are alternative payment service providers available to merchants. Other forms of e-payments such as Nets, PayNow and SGQR continue to be available," said MAS.

The regulator added in the statement that Wirecard's entities in Singapore had complied with MAS' directions to hold customer funds in segregated accounts with banks in Singapore. It is closely monitoring Wirecard's operations, it added.

Meanwhile, CNBC reported that thousands of British customers, including some businesses, were unable to access their cash on Monday (June 29) as some fintech apps relying on Wirecard to process payments were forced to freeze their accounts. This followed the move last Friday by UK's Financial Conduct Authority (FCA) ordering Wirecard's UK unit, Wirecard Card Solutions, to stop carrying out regulated activities.

The German payments giant last week filed for insolvency, owing creditors €3.5 billion (S$5.48 billion) after disclosing a €1.9 billion hole in its accounts that its auditor EY said was the result of a sophisticated global fraud. Its former chief executive, Markus Braun, was arrested on suspicion of market manipulation and released after posting bail of €5 million.

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

MAS said on Monday it is working with the Singapore police on its Wirecard probe, along with the Accounting and Corporate Regulatory Authority (Acra).

The Commercial Affairs Department (CAD), the police unit that deals with white-collar crime, began criminal investigations into Wirecard's Singapore operations in February 2019. CAD also raided Wirecard's local offices at Mapletree Business City after fraud allegations.

Wirecard's Singapore entities are not currently regulated by MAS, though the authority said last week it had received a licence application under the new Payments Services Act. The Act provides for a grace period for entities conducting regulated activities to apply for a licence, MAS said.

Two local entities - Wirecard Asia Holdings and Wirecard Singapore - are on MAS' exemption list, according to the authority's website.

Singapore hosts Wirecard's Asia-Pacific headquarters and the company has been expanding aggressively in the region, which accounted for almost 45 per cent of the group's reported revenue in 2018, second only to Europe, Bloomberg reported.

Separately, Wirecard's US unit - Wirecard North America - has put itself up for sale. The unit, formerly known as Citi Prepaid Card Services, said its business is continuing without interruptions from the scandal at its parent, Bloomberg reported.

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