Yahoo Finance Surge in activity as Wirecard UK unlocks cash for customers
Activity on Wirecard accounts surged to three times their usual level on Tuesday as British customers regained access after the City regulator lifted a freeze imposed last Friday to prevent customers’ money being disposed of by the firm.
The freeze had left hundreds of thousands of users of providers including FairFX, Pockit and subprime lender Morses Club’s U Account unable to access their money over the weekend and into Monday night.
Restructuring experts at Alvarez & Marsal are still exploring options for Wirecard’s UK business after its German parent filed for insolvency amid an accounting scandal.
The Financial Conduct Authority said: “We know that some customers have faced difficulties over the weekend but the steps we took were the right ones to protect everyone's money.”
The unfreezing of the accounts triggered an increase in transaction levels but a person close to Newcastle-based Wirecard UK said that customers were adding money to their accounts more often than usual as well as making more withdrawals.
Some providers had encouraged customers to hastily withdraw their cash before accounts were frozen on Friday sparking fears of a "run" on accounts when they were unlocked.
Payments firms could be hit with new rules to shore up weaknesses in the sector exposed by the insolvency of Germany’s Wirecard.
Augustin Carstens, president of the Bank for International Settlements (BIS), said a more joined up approach may be needed to regulate the sector which has grown to include fintech firms operating through mobile apps.
Shares in Wirecard AG, the German parent company, briefly exceeded €9 (£8.22) before falling back. The shares were worth more than €100 before the firm revealed that it could not account for €1.9bn of cash on its balance sheet and admitted that the money probably doesn’t exist.
Wirecard’s staff in Germany still have not been paid their salaries for June which should have been paid by last Friday, according to reports.
It came as a lawyers filed a criminal complaint in Austria against Markus Braun, Wirecard's former boss, Jan Marsalek, former chief operating officer, accusing them of market manipulation and serious fraud.
Wirecard declined to comment.
