FinTech Payments

Mastercard, Visa Rethinking Wirecard Deals Amid Accounting Scandal

June 26, 2020 at 02:22PM

Mastercard and Visa are considering ending their agreements with Wirecard to process payments on their networks as the German financial technology company’s accounting scandal unravels, Bloomberg reported.

The world’s two biggest payment networks have told some Wirecard clients that access to their payment networks could be revoked, the news outlet reported.

If Mastercard and Visa cuts the cord with Wirecard it would have a significant impact on the suburban Munich’s payment processing company, the report noted.

“We continue to closely monitor developments and assess new information as it becomes available,” a Visa spokesperson said in an emailed statement to Bloomberg. “Our priority is, and will always be, maintaining the integrity of the Visa payments system and protecting the interests of consumers, merchants and our clients.”

Mastercard told the news service it is tracking news coverage of Wirecard.

“Our priority is ensuring people are able to continue to use their cards,” Mastercard said. “We will continue to work with all parties and stand ready to take any necessary action.”

Wirecard did not return a request for comment, Bloomberg reported.

In a statement on Monday (June 22), Wirecard said its IT systems continue to work without limitations.

At issue is $2.1 billion in missing deposits, 25 percent of the company’s holdings that Wirecard said it had deposited money in two Philippines banks. But the island nation’s lenders, BDO Unibank Inc. and the Bank of the Philippine Islands, said the money never entered the country.

Wirecard Founder and CEO Markus Braun was arrested earlier this week on charges of manipulating the market and misrepresenting accounts. He has denied any wrongdoing. The 50-year-old executive posted bond and was released on Tuesday (June 23).

Three years ago, Mastercard and Wirecard made the digital payment solution available to Wirecard merchants in the United Kingdom with the Pay by Bank app. Created by Vocalink, a Mastercard company, it allows debit payments for goods and services.

In 2016, Wirecard announced its partnership with Visa Europe Collab to provide its technology and banking solutions. The deal provided global FinTech startups with access to services from banking to software and payment solutions, risk management and card issuing from a single source.

On Friday  (June 26), PYMNTS reported Ernst & Young (EY), the independent auditor hired by Wirecard, said the company lied about the supposed deposits and was in the midst of “elaborate and sophisticated fraud involving multiple parties around the world” with regard to the $2.1 billion that may not exist.

Mastercard, Visa Rethinking Wirecard Deals Amid Accounting Scandal …

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