Wirecard Card Solutions Ltd. has announced plans to sell its U.K. operations more than two months after the disgraced German payments company filed for insolvency.
Under the terms of the agreement, the company’s card technology, clients and assets would be sold to Railsbank, the London-based FinTech. Some employees will go to Railsbank as well. Financial terms were not disclosed.
“Railsbank has proven production experience of running over 50 card programs in the United Kingdom, European Union, United States and Singapore and has all the supporting operational and license infrastructure,” Wirecard said in a statement on Friday (Aug. 28).
If approved by the court, the transfer of Wirecard Card Solutions’ customer accounts will take place between now and November. In the meantime, customers can continue to use their cards and access cash as usual, Wirecard said.
“In planning the future of the company, one of our key priorities continues to be that our valued customers get the best possible outcome,” said Thomas Jennings, managing director at Wirecard Card Solutions, in a statement. “We believe that our solvent wind-down proposal, including the proposed sale of assets to Railsbank, will achieve that key priority.”
Jennings said the hope is that its program managers will support the proposal. In addition, he thanked customers for their support, as well as Mastercard and Visa for their help in making the transition seamless.
Nigel Verdon, CEO and co-founder of Railsbank, said that customer and team needs are the priority. “The Railsbank team will conscientiously work on ensuring customers, program managers and team members have a seamless transfer to their new home,” he said in a statement.
Wirecard AG filed for insolvency in June in a Munich court following an auditor’s disclosure that $2.1 billion of supposed deposits were missing from two banks in the Philippines. The company is facing investigations by law enforcement in Munich, Singapore, the United Kingdom and the European Union.
Last week, Michael Jaffé, the court-appointed insolvency administrator, said that an agreement has been reached to sell Wirecard’s Brazilian business to Sao Paulo-based PagSeguro Digital, one of the nation’s largest mobile payment-based eCommerce companies.
“It is particularly pleasing that the sale of Wirecard Brazil has been the first success with respect to the sale of assets, because the framework conditions of the Wirecard insolvency proceedings have been, and still are, very difficult,” Jaffé said in a statement.
In addition, he noted that the sale of some of the company’s North American operations could be announced soon.
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