The break-up of Wirecard has begun as it agreed to sell what is left of the UK business to Railsbank, a UK FinTech backed by Visa.
Wirecard assets begin carve up as Railsbank takes UK entity
The UK deal, which is expected to be completed in November, would involve Railsbank taking on Wirecard’s UK payment card technology, clients and some staff. Railsbank declined to comment on the financial terms of the deal.
Wirecard will require written consent from the Financial Conduct Authority (FCA) to sell its UK operations. A person close to the regulator said it was not clear whether permission had yet been granted.
Administrators are in the middle of dismantling Wirecard, which was worth as much as €24 billion at its height but collapsed into insolvency in June after the revelation of one of postwar Germany’s largest frauds.
Wirecard Card Solutions (WCS), its UK subsidiary, issued prepaid cards and processed payments for other financial start-ups that did not yet have the necessary licences. It was at one time an important part of the UK’s FinTech infrastructure, providing early support to online-only banks such as Revolut and Monzo.
Railsbank, however, would inherit a significantly diminished customer base: many of Wirecard’s largest UK clients had already left or made plans to leave after regulators temporarily banned it from operating after the parent company’s administration in June.
Businesses including Morses Club, Curve and Soldo have stopped using WCS, while Anna Money is finalising its move and expects to transfer customers within weeks. The FCA ordered a temporary freeze on WCS’s activities to protect customer deposits and prevent it from transferring assets to its parent company. The freeze was enacted with little warning, and left hundreds of thousands of customers, including many vulnerable people, unable to access money for several days.
Last week, administrators also said an agreement had been signed for the sale of Wirecard’s Brazilian business to PagSeguro Digital, a New York-listed competitor. They added that the sales process for Wirecard North America, formerly Citigroup’s Prepaid Card Services business, was “well advanced” adding that “final acquisition offers are expected here shortly”.
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