service provider statements on wirecard ag

Hannah Brown • Jun 30, 2020 • 4 min read

Quick links to statements by service providers on Wirecard insolvency proceedings for e-⁠residents

Edit 1.7.2020: Since this blog was published, the UK Financial Conduct Authority (FCA) announced its decision to allow Wirecard Card Solutions Limited (the company providing the Holvi Business Mastercard and Payoneer Prepaid MasterCard) to partially resume operations. You can read the full statement from the FCA here. This means all Holvi Business MasterCards and Payoneer Prepaid MasterCards are now back up and running.

On 25 June, German fintech company Wirecard AG filed an application for insolvency proceedings in the Munich courts due to insolvency and indebtedness. This followed auditors finding accounting irregularities in the company’s balance sheet, and its former CEO being arrested for market manipulation and false accounting. The insolvency of Wirecard AG affects millions of customers of various fintech companies around the world that use its financial products and services.

The insolvency of Wirecard AG does not affect the operations of e-⁠Residency. You can still apply to be an e-⁠resident, create an Estonian company, and run your business online from anywhere.

However, it may have implications for some service providers and their e-⁠resident customers. For ease of reference and in full transparency for our e-⁠resident community, this blog post briefly describes how service providers are affected and links to their statements and actions in response.

Wirecard Bank AG (Germany) and Xolo

Wirecard AG announced that its subsidiary Wirecard Bank AG is not part of the insolvency proceedings. Wirecard Bank AG has made a full statement on its website, where it assures customers that: no disruptions are expected to the operation of payment processes for commercial partners; it is in extremely close communication with partners; and deposits are protected by two schemes at up to €19.7 million per customer.

Xolo has been offering Wirecard Bank AG IBAN accounts to e-⁠resident customers since March 2020. Due to the abovementioned insolvency proceedings, Xolo suspended the issuing of new IBAN accounts with Wirecard Bank AG last week. Xolo assured existing customers with Wirecard accounts that their funds are safe and protected.

Wirecard Card Solutions Ltd (UK), Holvi and Payoneer

Wirecard AG’s UK subsidiary Wirecard Card Solutions Ltd (WCSL) is also not part of the insolvency proceedings in Munich. However, on Friday 26 June, the UK Financial Conduct Authority (FCA) suspended WCSL from operating without any prior notice with the stated objective to protect customer money. WCSL issues card payment services to clients around the world, including relevantly for e-⁠residents, the Holvi Business MasterCard and the Payoneer Prepaid MasterCard.

Holvi has announced that all Holvi Mastercards are temporarily suspended due to this situation. Holvi says that it is now urgently working on a solution to restore card usage and will provide an update as soon as possible. Holvi assures customers that all other functions of their accounts are still fully available and that their funds remain safe, secure and accessible at all times as usual. Holvi insists that no customer funds are held by Wirecard AG.

Payoneer released a written and video statement for customers noting that all Payoneer Prepaid MasterCards provided by WCSL were temporarily frozen. According to Payoneer, it is communicating directly with WCSL and the FCA to lift the freeze as soon as possible and ensure that customer cards can once again be active and funds made available again. Payoneer states that it is also looking for an alternative card solution and will update customers as soon as possible. Payoneer assures that customer funds in Payoneer accounts are safe and that customers can still receive payments in, and withdraw funds out of, their virtual balance.

Again, we would like to stress that e-⁠Residency operations are not affected in any way by the insolvency of Wirecard AG. However, we understand that there are e-⁠residents who are clients of the abovementioned service providers and who therefore may be affected by the situation. In case of questions or support regarding your accounts with these service providers, please contact them directly.