Mobile payments firm Wirecard files for insolvency

  • July 7, 2020
  • Steve Rogerson

German electronics payments company Wirecard has started insolvency proceedings and company executive Oliver Bellenhaus was this week arrested in Dubai on suspicion of aggravated fraud.
Towards the end of last month, Wirecard’s management board filed an application to open insolvency proceedings with the Munich Local Court. Wirecard’s business activities are continuing. This followed the company reporting €1.9bn in missing cash. CEO Markus Braun resigned and was arrested.
The court has commissioned Munich lawyer Michael Jaffé as insolvency administrator.
The business operations of the group companies including the licensed units are still on-going. The parent company performs some central functions for the subsidiaries.
Payouts to merchants of Wirecard Bank will continue to be executed without restrictions.
Wirecard Card Solutions, headquartered in Newcastle, UK, has suspended its business operations due to an order issued by supervisory authority Financial Conduct Authority. The company has discussed measures with the authorities and may be able to continue operations.
Newly appointed CEO of Wirecard James Freis Junior started investigating allegations immediately on taking office. Among other measures, a number of advisors were commissioned to ensure neutrality and, in particular, independence from the former management board members of Wirecard.
Wirecard has commissioned US investment bank Moelis to oversee the sales process of Wirecard North America. Sales processes are being prepared for further subsidiaries of Wirecard.
Wirecard has been in a major player in helping retail stores around the world move to digital payments, including through mobile payment app Boon.
Boon is based on a virtual Mastercard and runs on Android or iOS devices. The Android version is available in Germany, Austria, Belgium, Netherlands, Spain and Ireland. It can be used via Apple Pay in France, UK, Switzerland, Spain, Italy, Ireland and Germany. Google Pay supports Boon in France.
Boon allows contactless payments via smartphone and tablet using NFC as well as online payments and peer-to-peer transactions.
In the mobile payments sector, Wirecard has negotiated several contracts with telecommunications providers for technical services with regard to mobile smartphone payments based on NFC. The payment processor offers its partners a mobile card reader as a white-label programme for the acceptance of card payments via smartphones or tablets.