Wirecard has already laid off a number of employees in its Germany office. The company believes that most of its 80 UK employees would be absorbed by Railsbank.
Wirecard UK business will be acquired by Railsbank. This was revealed by the payment processing company and this move is said to be the result of a solvent meltdown. Wirecard UK business had encountered problems after an audit of the company’s books showed funds missing.
A spokesperson for Wirecard AG (ETR: WDI) declined to comment on a timeline for the deal. Neither would they speak on the details of the negotiations.
The company provides payment processing services for fintechs such as ANNA Money and Pockit through agreements executed through third party services licensed to use Wirecard technology. These ‘programme managers’ authorized for UK financial services under Wirecard will give approval before the Wirecard – Railsbank deal is sealed.
Wirecard and Railsbank Deal
Wirecard has already laid off a number of employees in its Germany office. The company believes that most of its 80 UK employees would be absorbed by Railsbank, though it admitted there would be redundancies. If the deal goes well, Wirecard hopes its UK business will be taken over by Railsbank.
“We are delighted to have come to this agreement with Wirecard Card Solutions and thank its team for working positively with us during the process,” Railsbank founder and CEO Nigel Verdon said in a statement.
He stated that the focus of the deal is to meet the aspirations of customers and staff of the business. He said that the objective of the company entails a seamless transition of program managers to their “new home”.
Unexpected Collapse
Earlier this year, the parent company of Wirecard spectacularly collapsed after an audit showed that $2.3 billion was missing from its account. The scandal that followed led to the arrest of key officials of the firm. The CEO Jan Marsalek has since been on the wanted list of Interpol having disappeared. The UK operations of Wirecard has since been suspended. The disruption made funds inaccessible to customers. UK regulators froze Wirecard’s assets ostensibly to protect the funds of customers.
According to the managing director of Wirecard UK:
“In planning the future of the company, one of our key priorities continues to be that our valued customers get the best possible outcome. We believe that our solvent wind-down proposal, including the proposed sale of assets to Railsbank, will achieve that key priority.”
The outcome of the negotiations now depends on the disposition of the Wirecard programme managers. The company managers hope they’ll get this critical support to seal the deal.
Chuks is a blockchain enthusiast and finance researcher that has covered the crypto sphere for several years. He believes that the evolving technology would change how we do business.
