Singapore has ordered Wirecard to discontinue payment services in the city-state, which is the most dramatic regulatory intervention in the German payment group’s remaining operations since the collapse in June.
The Singapore Monetary Authority, the country’s de facto central bank, announced on Wednesday that it had Wirecard Singapore company to discontinue payment services and return all customer funds by October 14th.
“MAS has observed the effects of the insolvency of Wirecard AG on the ability of Wirecard SG to continue to offer payment services in Singapore,” said a statement by MAS. “Wirecard SG has informed MAS that it can no longer offer payment processing services to a significant number of merchants. MAS has determined that it is in the public interest that Wirecard SG their Payment services and immediately return all customer funds ”.
Credit card payments at merchants who use Wirecard’s services and prepaid cards from the German group are affected, the regulatory authority said. “Customers who have not yet made alternative arrangements are encouraged to do so immediately,” she added.
Wirecard services are widespread in Singapore, where cafes, bars and restaurants across the island operate the company’s payment terminals.
In 2017, Wirecard acquired 20,000 Citibank merchant customers, spread across 11 Asia-Pacific countries, in an ambitious deal that would make the company a household name in the region. Citigroup said it left the business worldwide.
Wirecard, once the darling of the German fintech industry, went bankrupt in June after admitting that its accounts were missing around 1.9 billion euros in cash. The Financial Times last year reported Fraud allegations at Wirecard’s Asia headquarters in Singapore, which led to a raid on the company’s offices and the initiation of criminal investigations.
In July, Singapore expanded its investigations and launched criminal investigations against two companies with links to German fintech. It also accused a Singaporean businessman involved in one of these companies with invoice forgery. He is accused of having played the role of trustee for fake bank accounts that Wirecard had filled with cash for auditors. The businessman’s lawyer and the other legal entity declined to comment.
After the collapse of Wirecard in June, the MAS demanded that customer funds from activities on the island be kept in separate accounts at Singapore’s banks.
Wirecard was not regulated by the MAS and did not require a license to operate in the jurisdiction when the FT first reported fraud allegations in the group’s Singapore offices. In January, a new Payment Services Act with an expanded scope came into force. Since then, Wirecard has been operating under a grace period for companies that are involved in activities that are now subject to regulation in order to apply for an MAS license.
Wirecard did not immediately respond to requests for comments.