Singapore businesses are struggling to get paid following the shutdown of German payment processing firm Wirecard, according to a Monday (Oct. 12) report in the Financial Times. Since the shutdown, Singapore businesses have pushed to process payments for such things as telephone bills and restaurant meals.
The Monetary Authority of Singapore (MAS) ordered the Wirecard closure in September after the German FinTech filed for insolvency in June. It also directed Wirecard to return customers’ funds by Oct. 14.
“Customers who have not yet made alternative arrangements are encouraged to do so promptly,” MAS told FT.
Regardless of the arrangements, area businesses were not ready when the announcement was made and weeks later started asking customers to “make payments via bank transfers, cash or external digital platforms.”
An employee at a French café said Wirecard’s shutdown led it to lose some customers. “Some go to the ATM [to get cash] and never come back.”
The five-star Capella Singapore said “the shutdown was certainly disruptive” and it had “received no prior warning” about Wirecard’s interruption. They said they don’t think they lost customers.
The downfall of Wirecard followed a scandal involving roughly $2.1 billion in missing money from its accounts.
“The sudden cessation of Wirecard . . . took everyone by surprise,” said the Singapore telecommunications firm M1. It had to send text messages to its recurring monthly payments customers to make alternate arrangements since Wirecard stopped working.
“It is a hassle,” a Singapore-based commercial manager and M1 customer told FT. “Pretty much all the normal utility bills you have set up to automatically debit on your card have been stopped.”
Wirecard acquired 20,000 merchant clients of Citibank, spread over 11 Asia-Pacific countries, however, Citigroup said it has “exited the business globally.”
Three of the biggest Wirecard lenders have declared losses due to Wirecard.
While fighting accounting fraud allegations, Wirecard executives executives are alleged to have raided the company to the tune of $1 billion.
Selected by Fintech Tube