In the wake of the collapse of the German Wirecard and the subsequent filing for insolvency proceedings, the UK regulator Financial Conduct Authority (FCA) last week temporarily prohibited the operation of Wirecard Card Solutions Ltd. This affected numerous Wirecard partners who had issued debit cards to their customers via the German Fintech. Even hundreds of thousands of cardholders were suddenly able to access their credit balance at the respective Wirecard partner or pay bills with debit cards (read this CNN report). The FCA suspension caused quite a turmoil in the FinTech scene and despair among the cardholders. This in turn has put the FCA under pressure.
Yesterday, the FCA announced that Wirecard‘s UK subsidiary may resume operations under observation.
On 29 June 2020, the FCA provided written consent to allow Wirecard to resume issuing e-money and providing payment services. The restriction on activities will lift at 00.01 on 30 June 2020.
FCA announcement
We are certain that the collapse of Wirecard will cause enormous collateral damage to the global FinTech scene. The short-term suspension of the FCA was just the beginning. In this respect, Wirecard will continue to cause the regulators in the various regulatory regimes a lot of headaches.
After the FCA decision was announced, the Wirecard share made a huge jump in price at a low level. It jumped by more than 110% to € 7.
