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Singapore ordered Wirecard to cease payment services in the city-state, marking the most dramatic regulatory intervention in the remaining operations of the German payments group since its collapse in June.
The Monetary Authority of Singapore, the country’s de facto central bank, said on Wednesday that it ordered Wirecard entities in Singapore to cease payment services and return funds from all customers by October 14.
“MAS has been monitoring the impact of Wirecard AG’s insolvency on Wirecard SG’s ability to continue to provide payment services in Singapore,” MAS said in a statement. “Wirecard SG has informed MAS that it cannot continue to provide payment processing services to a significant number of merchants. MAS has assessed that it is in the public interest that Wirecard SG cease its payment services and promptly return all customer funds ”.
Credit card payments at merchants using Wirecard services, as well as prepaid cards issued by the German group, will be affected, the regulator said. “Clients who have not yet made alternative arrangements are encouraged to do so immediately,” he added.
Wirecard services are widely used in Singapore, where cafes, bars and restaurants across the island operate the company’s payment terminals.
In 2017, Wirecard acquired 20,000 business customers from Citibank, spread across 11 countries in Asia and the Pacific, in an ambitious deal that sought to make the company a household name across the region. Citigroup said it had exited the business globally.
Once the darling of Germany’s fintech sector, Wirecard sank into insolvency in June after admitting about € 1.9 billion in cash was missing from its accounts. Last year, the Financial Times reported allegations of fraud at Wirecard’s Asia headquarters in Singapore, prompting a police raid on the company’s offices and the launch of a criminal investigation.
In July, Singapore expanded its investigation with the launch of a criminal investigation into two companies linked to German fintech. He also accused a Singaporean businessman involved in one of these companies of falsifying accounts. He is accused of playing the role of a bogus bank account manager, which Wirecard told auditors was full of cash. The businessman’s attorney and the other entity at the time declined to comment.
After Wirecard’s collapse in June, MAS demanded that it keep client funds derived from activities on the island in separate accounts with Singapore banks.
Wirecard was not regulated by MAS and did not require a license to operate in the jurisdiction when FT first reported allegations of fraud at the group’s Singapore offices. In January, a new paid services law came into force with expanded coverage. Since then, Wirecard has been operating under a grace period for companies involved in activities that are now subject to regulation so they can apply for a MAS license.
Wirecard did not immediately respond to requests for comment.
