Ex-Wirecard clients scramble to process payments in Singapore
Regulator’s decision to stop the German payment group’s local operations disrupts businesses
Businesses across Singapore have been left scrambling to process payments for everything from hotel stays to telephone bills after the city-state’s regulator shut down the payment services of fraudulent German group Wirecard.
Cafés, restaurants, hotels and mobile network providers were left with no payment processing systems after the Monetary Authority of Singapore, the de facto central bank, late last month ordered Wirecard to cease payment services in the city-state.
Some banks in Singapore had advised their clients to consider switching payment processors after the disgraced German fintech filed for insolvency in June. The MAS that month pointed to “alternative payment service providers available to merchants” and the day it ordered Wirecard to terminate operations said: “Customers who have not yet made alternative arrangements are encouraged to do so promptly.”
But many businesses were caught off guard and now, almost two weeks later, are asking customers to make payments via bank transfers, cash or external digital platforms.
“On October 1 it [Wirecard’s payment terminal] stopped working,” said an employee at Paul, the French café chain, adding that Wirecard’s shutdown led it to lose some customers. “Some go to the ATM [to get cash] and never come back.” Paul declined to comment.
Capella Singapore — the five-star hotel that hosted the 2018 summit between US president Donald Trump and North Korean leader Kim Jong Un — was also a Wirecard customer.
While “the shutdown was certainly disruptive” it did not lead to the hotel losing customers, Capella said, adding that it had “received no prior warning” about Wirecard’s interruption.
Capella clients may now pay using cash, bank or digital fund transfers as well as online credit card platforms. The hotel has shortlisted Singaporean bank UOB to reinstate credit card payments.
Wirecard services were widely used in the city-state, with thousands of merchants across the island operating the German group’s payment terminals.
The fintech’s competitive pricing helped make it popular. “Wirecard was the cheapest,” said the Paul employee. “That’s why everyone had it. Wirecard charged 2 to 3 cents per [card] transaction [while] others charge [up to] 20 to 30 cents.”
Once the darling of Germany’s fintech sector, Wirecard collapsed after admitting that about €1.9bn in cash was missing from its accounts. The Financial Times last year reported allegations of fraud at Wirecard’s Asia headquarters in Singapore, prompting a police raid at the company’s offices and the launch of a criminal investigation.
“The sudden cessation of Wirecard . . . took everyone by surprise,” said M1, a Singaporean telecommunications company which has sent out texts asking customers to pay bills via its app given recurring monthly payments were temporarily unavailable after Wirecard’s shutdown. Clients may also use digital payment platforms or fund transfers. M1 expects to resume credit card bill payments in two weeks via a local bank and a new payment processor.
“It is a hassle,” said a Singapore-based commercial manager and M1 customer. “Pretty much all the normal utility bills you have set up to automatically debit on your card have been stopped.”
In 2017, Wirecard acquired 20,000 merchant clients of Citibank, spread over 11 Asia-Pacific countries, in an ambitious deal that was intended to make the company a household name across the region. Citigroup has said it exited the business globally.