The FCA said it had taken the decision so that Wirecard “should not pay out or reduce” any money, except on the instructions of its customers. Wirecard Card Solutions provides technology and payments processing services to dozens of UK digital account and prepaid card providers, which have been forced to suspend services to customers.
“Our primary objective is to protect the interests and money of consumers who use Wirecard,” the FCA said in a statement. On Monday, the regulator said that the company was making progress in addressing its concerns but that it won’t lift restrictions until it is comfortable that “all clients’ money is safe.”
Pockit, which says it is for people who have been “ignored or rejected” by main street banks, has 500,000 customers, some of who were due to receive support payments on Monday.
The FCA said that individuals experiencing financial hardship might be able to get help from a local welfare assistance scheme. “We are contacting the small number of claimants who we believe have been affected to make sure they have the support they need and can access their money as quickly as possible,” a spokesperson for the Department for Work and Pensions said.
ANNA Money, a business banking startup, contacted customers on Friday telling them to urgently withdraw money from their accounts before they were frozen. That was too late for many. “We had no warning that Wirecard in the UK was in any trouble,” the company now tells customers on its website. “Your ANNA card details and the money in your ANNA account remain safe and secure — but unfortunately you cannot currently access them.”
Curve, which allows users to spend money from all their accounts using a single card, had already restored some of its services late Sunday. Its 1.3 million customers all have accounts with other banks.
“The call I received at 9am on Friday was the worst a founder could hear — that our accounts would be closed imminently, through no fault of our own,” Curve founder and CEO Shachar Bialick said in a statement.
Wirecard collapsed into insolvency last week after its auditor, EY, refused to sign off on the company’s financial statements and said that more than $2 billion was missing from its accounts. Markus Braun, Wirecard’s chief executive, who was arrested and then released on bail of €5 million ($5.7 million), has suggested the company may itself be the victim of fraud.
Under UK Electronic Money Regulations, Wirecard Card Services is required to ringfence customers’ money in a separate bank account. These funds are not protected by the Financial Services Compensation Scheme, however, which acts as deposit insurance in the event of a bank failure.