Finance News

Wirecard's UK unit confirms plan to promote property after a disgraced cost firm went bust

An employee demonstrates the online payment smartphone app from Wirecard AG at the company's booth at the Noah Technology Conference in Berlin on Thursday, June 13, 2019.

Krisztian Bocsi | Bloomberg via Getty Images

Wirecard Card Solutions, the British unit of the disgraced German payment company Wirecard, has announced that it will sell some assets to British financial technology company Railsbank as part of a solvent liquidation.

The company said it will meet on Friday to come up with a proposal setting out the terms of selling its card technology and related assets in the UK, as well as the transition of its customers and employees to Railsbank. The aim is to complete the migration of customers from Wirecard Card Solutions to Railsbank by November.

"We hope that our program managers support our proposal and that we can make positive progress for everyone involved," said Tom Jennings, Managing Director of Wirecard Card Solutions. "I would like to thank our customers for their continued support and Mastercard and Visa for their help in making this transition as seamless as possible."

Munich-based Wirecard filed for bankruptcy in June, marking a dramatic decline for a company that was once revered as one of the hottest technology companies in Germany. The case came after an accounting scandal that peaked when Wirecard admitted that it was missing 1.9 billion euros ($ 2.3 billion) on its balance sheet.

Former Wirecard executives, including long-time CEO Markus Braun, were arrested on suspicion of orchestrating trade fraud amounting to 3.2 billion euros. The Munich public prosecutor's office is investigating Wirecard on suspicion of money laundering. For its part, Wirecard has announced that it will not make any further statements.

The news of Wirecard's UK asset sale comes after thousands of UK consumers were temporarily banned from their accounts using online banking apps that relied on Wirecard to process payments. The turbulent episode was the result of a temporary cessation of operations by Wirecard, enforced by the Financial Conduct Authority, the UK's financial services watchdog. The regulator said it took such measures to ensure customers' funds are protected.

Railsbank, the company that is buying Wirecard's business in the UK, sells banking software to customers who use its technology to develop their own digital financial services products. The company was founded in 2016 and is backed by the payment giant Visa.

"We are very pleased about this agreement with Wirecard Card Solutions and thank the team for the positive cooperation during the process," said Nigel Verdon, co-founder and CEO of Railsbank. "Ultimately, customer and team needs are our priority."

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