The U.K. Financial Conduct Authority ( FCA) announced on 29 June that it would lift the restrictions imposed on the German payment firm Wirecard AG, allowing Wirecard to resume operations. The watchdog noted that it had provided a written agreement to Wirecard ‘s subsidiary, Wirecard Card Solutions, to resume its e-money and payment services, although some limitations remain.
The UK financial watchdog ordered the e-payment firm to halt operations on 26 June, following the submission by its parent company of an insolvency application in Germany. The move to lift the ban allows the users of the firm to access the financial services they have been locked out.
Wirecard’s clients can now access financial services
The limitations imposed on the fintech firm include not being able to dispose of any assets or money, not to run any regulated activity, and put a statement on its official website notifying users that it is no longer authorized to carry out regulated activities. Nevertheless, clients can now use their debit cards freely without interruptions. A statement by FCA reads:
“We know that some people may have faced difficulties over the weekend and we worked with DWP, HMT and the Home Office in order to help anyone suffering financial distress. Anyone who is still in difficulties should see our website for more details.”
Insolvency proceedings
Despite the lifting of the restrictions by the FCA, experts suggest that the issue could have permanent damage to people’s trust in fintech firms. In particular, firms such as Curve and Anna rely on their e-money licenses to manage payments but do not hold banking licenses to hold client funds. The funds are instead ring-fenced with a third party financial institution.
Germany-based Wirecard has stated that it will continue to operate despite insolvency filings last week. The company also stated that it is exploring whether its subsidiary firms will also be required to apply for insolvency. In addition, the American subsidiary of the company which it acquired from Citigroup in 2016; stated on 29 June that it was looking for a buyer.