Today, on July 23, our co-founder and COO Den Melnykov and speakers from VIALET, SBSB, Dukascopy Bank, ELPASO, and International Advisers Association participated in an online session on how Wirecard AG’s situation will affect fintech.
We recall that the German payment company Wirecard filed for insolvency on June 25, owing creditors almost $4 billion after disclosing a $2.17 billion hole in its accounts that auditor EY said was the result of a sophisticated global fraud.
At the online session, experts discussed all the reasons for the Wirecard collapse. Some believe it is related to dealing with high-risks, but our COO doesn’t share this point of view.
Wirecard participated in many exhibitions and conferences, from massive WebSummit in Lisbon to large gaming event ICE London. I guess their work with high-risks has nothing to do with what happened to the company, given the fact that such players as PayPal also presented their solution for casinos, gambling, and gaming at ICE London this year, and that’s how many reputable businesses earn their first capital.
Speakers also talked about how this situation affected card products by Payoneer, Revolut, Pockit, Anna Money, and others, as well as issues with Wirecard Card Solutions Limited products. One of the questions was why some companies working with Wirecard got hit harder than the others. Den noted the caused damage depended on whether Wirecard was the company’s single provider or not. For instance, Anna Money had to pause its activity for five days due to FCA restrictions.
Relying on a single provider is always risky and may result in serious reputational losses, as this case has shown. Our business is about diversification and working with multiple payment partners, ensuring the stability and flexibility of operations.
As for the possible outcomes, experts agreed that Wirecard would most likely recover and resume activity, probably after a rebranding.
We have an integration with Wirecard and some active traffic through it. Some of our clients believe that the situation will be solved and highlight it’s a good company in terms of technologies and innovation.
Den also believes this situation will lead to new regulations aimed at large fintech firms.
I guess in the nearest future we will witness a new amendment to PSD2 regarding overseeing big players like Wirecard. They will face new and more strict requirements, similar to ones for the banks.