FCA said it made the decision so that Wirecard “does not have to pay or reduce” any money, except for instructions from its customers. Wirecard Card Solutions provides payment processing technology and services to dozens of UK digital account and prepaid card providers who have been forced to discontinue customer services.
“Our primary goal is to protect the interests and money of consumers who use Wirecard,” said the FCA in a statement. On Monday, the regulator said the company was making progress in addressing its concerns, but that it will not lift restrictions until it is comfortable that “all customer money is safe”
Pockit, which says it is for people who have been “ignored or rejected” by major street banks, has 500,000 customers, some of whom were expected to receive support payments on Monday.
The FCA has said that people in financial difficulty may be able to get help from a local social assistance scheme. “We are contacting the small number of applicants we believe have been affected to make sure they have the support they need and that they can access their money as quickly as possible,” said a spokesman for the Department of Labor and Pensions.
ANNA Money, a corporate banking startup, contacted customers on Friday telling them to urgently withdraw money from their accounts before they were frozen. It was too late for many. “We didn’t warn that Wirecard in the UK was in trouble,” the company now tells customers on its website. “The details of your ANNA card and the money in your ANNA account remain safe, but unfortunately you cannot currently access it.”
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 phone call I received at 9 am on Friday was the worst a founder could hear – that our accounts would be closed imminently, because of us,” said Shachar Bialick, founder and CEO of Curve.
Last week, Wirecard went bankrupt after its auditor, EY, refused to sign the company’s balance sheet and stated that more than $ 2 billion was missing from his accounts. Markus Braun, Wirecard’s chief executive officer, who was arrested and then released on bail for $ 5 million ($ 5.7 million), suggested that the company itself could be subject to fraud.
Under UK e-money law, Wirecard Card Services is required to fence customers’ money into a separate bank account. These funds are not protected by the financial services compensation scheme, which acts as deposit insurance in the event of a bank bankruptcy.