Wirecard’s largest business in the UK was bought when it acquired the pre-paid card issuing division of the Newcastle Building Society.
It jumped into the big league.
That, perhaps surprisingly, was in December 2011 – we were still using the term “Financial Technology” then and “FinTech” was not in common use. And Americans were still trying to convince the world that pre-paid cards should be called “gift cards.”
Wirecard created Wirecard Card Solutions Limited and that company was the takeover vehicle.
But the Newcastle Building Society had been developing its business across Europe – just 24 people in Newcastle ran an operation that had expanded to a further six EU states.
The announcement of that takeover foreshadowed something “The acquisition will happen in two phases: the first will involve Wirecard Card Solutions Ltd. providing core functions to Newcastle Building Society as an outsourcing service provider; and the second seeing Wirecard Card Solutions Ltd. take full control of the business upon receipt of its authorisation as an Electronic Money Institution from the UK Financial Services Authority. ”
Move in, start business, sort out the regulatory shit later. It was an Uber-like culture that Wirecard never lost.
And it all came to a head in June 2020.
It is not immediately clear how the Financial Conduct Authority communicated the freezing of Wirecard’s UK accounts beyond the notices on the Financial Services Register which is a publicly accessible database for the Financial Conduct Authority and the Prudential Regulation Authority, a division of the Bank of England.
There are several statements on the FCA’s website – one is dated 26th June, the date upon which the action was taken – but that statement has been “amended” and now refers to the reinstatement of services. It might be that Wirecard was told early on 26th but the rest of the world later.
In the absence of clear information on the FCA’s website, it’s not possible to tell from primary sources.
On the Register, the following Order appears:
“Institution to refrain from providing Account Information Services or Payment Initiation Services for an indefinite period.
Must comply with the requirements in regulation 78A(2)(b)of the Electronic Money Regulations 2011 to refrain from providing account information services or payment initiation services for an indefinite period.”
That essentially disconnected Wirecard’s computers from the outside world.
And no computers equals no card or merchant activity. It is an order that takes immediate effect.