But a week later, it’s suggested that Europe’s fintechs should face little direct upheaval, even in the event of Wirecard
collapsing.
This is because most fintechs clients operate under
Wirecard Card Solutions(WCS) — an FCA-regulated, UK-based entity
headquartered in Newcastle, rather than Munich-based Wirecard AG.
Although WCS sits inside the Wirecard group, WCS is an entirely independent subsidiary that has its own board, regulatory and accounting standards. WCS is also financially self-sufficient; it recorded a £2.5m pre-tax profit in 2018, according to
Companies House Filings.
That means that in the worst-case scenario that Wirecard AG goes bust, WCS can continue operating as an issuer, says payments expert David Parker.
“No one is quite grasping it. Yes, they [WCS and Wirecard AG] share the same name. But they’re not the same thing. They are separately regulated entities, so the WCS money is totally ringfenced. It’s like an island surrounded by water,” he told Sifted.