Millions of online bank accounts will remain frozen for the fifth day

Millions of online banking and payment cardholders face a fifth day without access to their funds after the UK’s Financial Conduct Authority refused to lift restrictions on a Wirecard subsidiary.

The FCA on Friday imposed a near-immediate suspension on Wirecard Card Solutions (WCS) Limited, after its parent company became insolvent after admitting massive financial fraud.

This resulted in the suspension of millions of banking applications and payment card accounts managed through WCS. At least a dozen different services were affected, including Pockit, Anna Money and U Account.

This afternoon, the FCA issued an update stating that Wirecard’s operations remain suspended as the financial watchdog is not yet satisfied that the funds are not misappropriated.

“Teams across FCA have been working with the company and other international and UK authorities over the weekend, and we have seen good progress by the company in meeting the terms we have fixed,” the FCA update read.

“We are keeping the pressure on the firm to resolve these issues which would allow it to operate under certain conditions. However, we cannot lift the restrictions without ensuring that the company has been able to meet all our concerns, for example that all customers’ money is safe. We hope to be able to post an update soon.

The FCA says its “primary objective has always been to protect the interests and money of consumers who use Wirecard”, but that may not reassure the millions of customers who cannot access funds in their accounts or use their cards. payment to make purchases.

Some of the affected banking apps are specifically designed for small businesses or the self-employed, with some users saying their livelihoods are at risk from the suspension as they are unable to generate invoices or access bank funds. business.

Industry anger

Many within the fintech industry are angry at how the FCA imposed the suspension on just one hour’s notice, giving banking services little to no chance to notify their customers.

The Emerging Payments Association (EPA), which represents some of the affected services, says fintech firms face irreparable damage to their reputations if the FCA does not quickly lift the suspension.

“The Emerging Payments Association and its members urge the FCA to unblock Wirecard Card Services accounts as soon as possible, for the benefit of cardholders, businesses and their employees, and the UK fintech industry. “, she said in a statement released today.

“If this suspension is not lifted quickly, we believe there will be significant and lasting damage to UK individuals, businesses and prospects as leaders in fintech today and in the future.”

The EPA says many consumers will have suffered serious harm as a result of the suspension. “Those who receive payments on their prepaid accounts such as Pockit and The Change Account, including the vulnerable, those without access to traditional banking services, those with low incomes receiving social benefit programs and young people , will not receive them,” he said.

“They won’t be able to pay other bills, including food, utilities and direct debits. A few will simply be inconvenienced, but many will suffer and some will become emotionally distressed and traumatized, with unknown consequences for their well-being. being and their health.

Ascending curve

Some of the affected services managed to find quick workarounds. Curve, which is believed to have around 1.5 million users, took over many of its services today after signing a deal with a new payment processor and bringing other things in-house.

We are thrilled to have been able to complete the complex services transition in such a short time,” Curve Founder and CEO Shachar Bialick said in a statement. “Working closely with our partners at Mastercard and, we have ensured minimal disruption at a time of significant upheaval in European fintech.”

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David A. Albanese