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June 29, 2020Blog Posts

Wirecard scandal hits UK consumers as online banking apps freeze accounts

CNBC

Thousands of British consumers have been unable to access their cash as some financial technology apps relying on scandal-hit payments processor Wirecard were forced to freeze their accounts.

On Friday, the Financial Conduct Authority (FCA) ordered the German firm’s U.K. unit, Wirecard Card Solutions, to stop carrying out regulated activities. It comes after Wirecard filed for insolvency following the revelation that 1.9 billion euros ($2.1 billion) of cash had gone missing from its accounts.

That regulatory action impacted several British online banking apps, including Curve, Anna, Pockit and U Account, as they relied on Wirecard’s systems to process payments. Customers of the apps range from individual users to businesses depending on fintech services to operate.

Curve has, however, recently managed to get its cards up and running after staff worked through the weekend to fix the situation. The company has transitioned payment processing from Wirecard to Checkout.com, a rival fintech company based in London. Curve users can now pay with their cards again, however mobile wallets like Google Pay and Apple Pay still aren’t available yet.

Experts say the debacle could lessen the public’s trust in the U.K.’s fintech sector. Britain has one of the world’s top fintech industries, with well-known homegrown start-ups including Revolut, Monzo and TransferWise.

Source

File:Wirecard Logo.svg - Wikimedia Commons

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