MAS orders Wirecard to stop payment services in Singapore
On top of pulling plug on payment services, the German company also has to return all customers' funds by Oct 14
The Monetary Authority of Singapore (MAS) has ordered Wirecard to stop its payment services in Singapore, in a move that will force businesses that still use the German company's systems for credit card and other digital payments to shift to other options.
Some users of Wirecard SG's prepaid cards will be affected as well, said the regulator yesterday.
On top of pulling the plug on its payment services, Wirecard also has to return all customers' funds by Oct 14.
The Straits Times understands that this refers to funds held by Wirecard as part of processing payments for merchants, as well as corporate customers which issue prepaid cards.
Once a fintech giant with businesses spanning the globe, Wirecard filed for bankruptcy in June after disclosing that €1.9 billion (S$3 billion) of cash, supposed to be in bank accounts in the Philippines, did not exist.
Payment gateways like Wirecard act as a link between financial institutions.
When a bank customer pays for his purchase at a retailer using a credit card, payment gateways alert the cardholder's bank that a transaction is in process.
Banks will then indicate whether the customer has sufficient credit to make the purchase.
The retailer receives the payment, and the payment gateway typically receives a cut from the transaction.
Wirecard's main business activities in Singapore are to process Visa and Mastercard payments for merchants and help companies issue prepaid cards.
Singapore is home to Wirecard's Asia-Pacific headquarters in Pasir Panjang.
Wirecard was still listed as a tenant at the building when The Straits Times visited the premises yesterday.
The MAS said that it has been monitoring the impact of parent company Wirecard AG's insolvency on the ability of its Singapore entities to continue providing payment services here.
However, Wirecard SG has told the authority that it is unable to continue providing payment processing services to a "significant number of merchants", it said.
As such, MAS assessed it is in the interest of the public for Wirecard SG to cease its payments services and promptly return all customers' funds, it said. "This provides the greatest certainty to customers on their appropriate course of action, including seeking alternative service providers."
Alternative forms of e-payment available in Singapore include Nets, PayNow and SGQR. In addition, banks such as DBS Bank, United Overseas Bank and OCBC Bank, as well as payment services provider Nets, provide merchant acquisition services.
Some merchants that have used Wirecard are now offering consumers other payment options. For example, the Breadtalk outlet at Vivocity did not accept credit cards when The Straits Times visited yesterday, suggesting customers use cash instead.
The Straits Times understands that companies across various sectors such as Subway and Gong Cha had used Wirecard, although it is unclear if and when they have made the switch. Wirecard had also provided payment processing solutions for taxi company ComfortDelgro.
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