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SINGAPORE: Consumers trying to use their credit cards may encounter difficulties after Wirecard stopped providing services in Singapore, prompting local businesses to look for other payment providers.
The Monetary Authority of Singapore (MAS) had earlier this week ordered the troubled German company to stop payment services here and return all customers’ funds by October 14.
Wirecard’s main business activities in Singapore are processing payments for merchants and helping businesses issue prepaid cards.
READ: MAS orders Wirecard to cease payment services in Singapore and return customer funds
Visa said it suspended payment authorizations for Wirecard on October 1, following instructions from MAS.
“This means there may be some disruption for Visa cardholders when transacting at various merchants using Wirecard services in Singapore,” a Visa spokesperson said on Friday (October 2).
“Visa is working closely with partners and customers who are affected by the termination of Wirecard’s procurement services in Singapore by supporting them with the migration to alternative service providers to ensure that disruptions are kept to a minimum,” said the spokesman.
Visa added that its priority is to maintain the integrity of its payment system and “protect the interests of consumers, merchants and customers.”
Mastercard similarly said that it is working to limit disruptions.
“Our priority is to ensure that people can continue to use their Mastercard cards,” said a spokesperson. “We will continue to work with all parties to take the necessary steps to limit disruption to transactions.”
Mastercard referred merchants to a list of acquirers (service providers that help businesses process debit and credit card payments for customers) on its website.
READ: German lawmakers launch investigation into Wirecard collapse
Munich-based Wirecard collapsed in June after its auditor EY refused to approve its 2019 accounts because it could not confirm the existence of 1.9 billion euros (S $ 3 billion) in cash balances in trust accounts, They represent about a quarter of your balance. bed sheet.
The firm later said that the amount likely never existed. He filed for bankruptcy, owing his creditors 3,500 million euros.
Wirecard’s clients in Singapore include taxi giant ComfortDelGro, which in 2008 outsourced the development of the cashless payment system for its taxis to the German company.
“We are aware of MAS’s directive regarding Wirecard services. We are currently working with several alternative providers to minimize the impact on our customers,” said Tammy Tan, director of corporate communications for the ComfortDelGro group.
Contactless payments firm EZ-Link noted that it previously worked with Wirecard to provide cashless solutions and card reload services.
“Since Wirecard first filed for bankruptcy in June, we began actively communicating and reaching out to our merchant partners to help ease their transition to other buyers,” said an EZ-Link spokesperson.
“While there may be some disruption for merchants who have not yet made the switch, we will continue to work closely with them to ensure a smooth transition and business continuity,” said EZ-Link, encouraging customers to reload their cards at through the Meanwhile, the EZ-Link mobile app.
BANKS RECEIVING THE MOST INQUIRIES FROM AFFECTED TRADERS
As Wirecard customers search for alternatives, banks told CNA that they have received a large number of inquiries from merchants looking to switch.
“Since July, we have received inquiries from merchants looking to switch from Wirecard to OCBC. Since then, we have brought on several new merchants from the retail, food and beverage and even education industries, ”said Vincent Tan, director of card business for OCBC Bank.
He added that OCBC Bank had also seen more inquiries on Friday morning, as Wirecard terminated its services the day before.
The bank has already “increased” the workforce to handle the largest number of requests during this period to ensure that merchants can resume payment operations as soon as possible, Tan said.
“Many new merchants have sought our guidance in the past two months on how to create more certainty about their payment processing options or become part of the UOB business network,” said UOB Director of Cards and Payments Singapore Choo Wan Sim.
Merchants come from a variety of sectors, including retail, e-commerce, supermarkets, food and beverage and insurance, he said.
UOB advises merchants on payment acceptance options, such as a unified point of sale terminal that accepts a wide range of payment schemes in a single terminal. The bank also shows merchants how to accept new payment schemes like Alipay and WeChat Pay.
Meanwhile, a DBS spokesperson said: “DBS has been working with merchants to help with their transitions for several months, and they also have access to alternative payment methods if necessary.”
READ: Wirecard fires more than half of the remaining staff in Germany
The end of Wirecard’s payment service would “temporarily” disrupt the payment processing market, said Dr. Emir Hrnjic, director of FinTech training and principal investigator at the Asian Institute of Digital Finance at the National University of Singapore (NUS).
Wirecard’s bankruptcy in Germany “scared” customers of its subsidiaries around the world, Dr. Hrnjic said, and merchants switched to other payment processing companies “immediately” after the news broke.
“The first customers to jump ship were low-risk companies that should have been easily incorporated by the competition.”
These competitors include NETS, PayNow and SGQR, who are “able and willing” to take on Wirecard customers.
However, small businesses could be affected by switching to NETS because it is more expensive, he said.
However, Wirecard’s competitors could find “innovative solutions” to reduce costs, Dr. Hrnjic said.
Germany will carry out a full parliamentary investigation on October 8 into the Wirecard collapse.
