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Curve Card suspended as the FCA closes down Wirecard UK, freezing customer accounts

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The Financial Conduct Authority closed down Wirecard UK this morning after the parent company filed for insolvency in Germany.  This came after the discovery of a €1.9 billion fraud.

(If you’ve not been following this fraud, I recommend reading the diary of the pivotal Financial Times investigation which is amusing.  “March 2019:  Attempting to visit some of these Wirecard partners in the Philippines, the FT instead discovers a retired seaman and his family, who are bemused to learn that their house is supposedly the site of an international payments business.”)

The UK entity, Wirecard Card Solutions, has or is currently providing back-end services for fintech groups such as Revolut, Tymit, Stocard, Soldo, ANNA Money and Curve.

ANNA Money put out a tweet this morning which read:

We are urgently recommending you withdraw your money from your ANNA account as soon as possible. This is due to the FCA placing requirements on our UK payment provider.”

Has Curve Card been impacted?

Curve Card was meant to be moving its processing away from Wirecard on 28th June.  This wasn’t quite soon enough, unfortunately.

Curve has published the following on its website:

What it means for Curve and you.

Curve depends on Wirecard for operational support, which means your Curve Card and all associated Curve services will be temporarily suspended.

Here are a few things we can tell you before you ask:

  • You can still access your account. You’ll be able to access your Curve account via the app and view all your existing account information and details of past transactions.
  • You won’t need a new card. Once we’re up and running again we anticipate that you will be able to continue to use your existing card.
  • Time travel is suspended. Go Back In Time is unavailable for the time being. 
  • Curve Cash is suspended. Your Curve Cash balance will remain the same, but is also inaccessible, for now.
  • Refunds may be delayed. We are currently unable to process refunds. When we are back up and running, we intend to address refunds as a priority.
  • Apple Pay, Google Pay & Samsung Pay won’t work. Using your Curve card through a digital wallet will also be unsuccessful while we’re down.

You can find out more here on the Curve website.

It’s difficult to tell at this stage how much of a problem this will be for Curve.  If it was on target to switch from Wirecard on 28th June then presumably alternative arrangements are in place.  With Wirecard UK no longer trading, however, Curve may have practical issues in completing the move.  Users also need clarity on whether transactions made in recent days will clear, and whether there will be any issues processing refunds for recent purchases which are eventually returned.

If the business is up and running again within a few days this is unlikely to cause any long term damage, but if it drags on for more than a week or so then users will quickly lose the Curve habit.

Has Revolut been impacted?

We have yet to see an official satement from Revolut but it looks like Revolut migrated away from Wirecard issued cards in 2018 and should therefore remain unaffected.

In a statement this morning, the FCA said:

“Our primary objective is to protect the interests and money of consumers who use Wirecard.  Following last week’s news of €1.9 billion missing from the accounts of the German company, Wirecard, we immediately placed requirements on the firm’s UK business so that it should not pay out or reduce any money it holds for its customers except on their instructions. On 26 June, we took additional measures to require the firm to cease all regulated activities in order to further protect customer money. This now means customers money cannot be accessed.

The FCA issued the following guidance at 9.53 this morning:

“Wirecard Card Solutions Limited (FRN 900051) is authorised and supervised by the FCA to issue e-money and provide payment services including, issuing e-money onto prepaid cards. Wirecard is authorised under the Electronic Money Regulations 2011 (the EMRs) and its activities are also subject to requirements under the Payment Services Regulations 2017 (the PSRs).

On 26 June 2020, the FCA imposed a number of requirements on Wirecard including, that the firm:

  • must not dispose of any assets or funds
  • must not carry on any regulated activities
  • must set out a statement on its website and communicate to customers that it is no longer permitted to conduct any regulated activities.

This follows publication to the FCA’s Register of a number of requirements which have been applied to Wirecard’s authorisation from 19 June 2020. The full requirements have been published to the FCA Register.

There are ongoing events in Germany concerning companies closely linked to Wirecard. Wirecard’s parent company, Wirecard AG based in Germany is currently the subject of law enforcement interest and insolvency proceedings. Wirecard AG is not supervised by the FCA.

Why did the FCA take this action now?

The FCA is the UK’s designated competent authority, responsible for granting firms based in the UK, permissions to undertake e-money activities and payment services and, it is within the FCA’s power to take supervisory action in certain cases to protect the interests of a firm’s customers. Under the EMRs, the FCA may impose such requirements as it considers appropriate which may require a firm to (a) take a specified action; or (b) refrain from taking a specified action. These types of requirements are known as ‘Own Initiative Requirements (OIREQ)’.

Our primary objective is to protect the interests and money of consumers who use Wirecard. Following last week’s news of €1.9 billion missing from the accounts of the German company, Wirecard, we immediately placed requirements on the firm’s UK business so that it should not pay out or reduce any money it holds for its customers except on their instructions. We have been working closely with Wirecard UK and other authorities over the past few days to take action that protects consumers. We are continuing to do this and on 26 June, we took additional measures to require the firm to cease all regulated activities in order to further protect customer money. This now means customers money cannot be accessed.

What should I do if I have e-money with Wirecard, use Wirecard to make payments or my prepaid card has stopped working? Who do I contact?

Customers should contact Wirecard or their card provider directly and may do so using the contact details on the Wirecard website or their card provider’s website.

Customers can also contact our Consumer Helpline for further information.

What should I do if I gave money to an agent of Wirecard?

E-money firms like Wirecard may provide payment services through agents. An agent is any person (this can be an individual or a company) who provides payment services on behalf of an e-money firm. E-money firms may also appoint distributors to distribute or redeem e-money but distributors cannot provide payment services. Unlike agents, there is no requirement to register distributors and agents are published to the FCA’s Register. Where e-money firms appoint agents or distributors they are responsible for anything done by an agent or distributor.

Customers should contact Wirecard directly if they are concerned, have any questions or for any updates.

What should I do if I gave money to an agent of Wirecard which is based in another EEA country?

An authorised e-money firm, like Wirecard, may provide payment services or e-money activities in another European Economic Area (EEA) country. This is called ‘passporting’. Passporting when a business carries on activities and services regulated under EU law in another EEA country on the basis of authorisation or registration in its home country. The activities may be carried out in the host country using a branch or a local agent / distributor or, on a cross-border services basis without a physical presence in the host country for example, a website.

Wirecard is passporting its services into all EEA countries and has established some agents and distributors in those countries. If a customer has given money to an agent or distributor of Wirecard which is based in another EEA country, they should contact Wirecard directly.

The account where I receive my benefit payments has been frozen, what do I do?

Please refer to the Department of Work and Pensions (DWP)(link is external) for support.

Are my funds protected by FSCS?

No. The Financial Services Compensation Scheme (FSCS) only applies to certain types of activity which does not include issuing electronic money or payment services. 

Under the EMRs and PSRs, there are rules on how customers’ money should be protected and these requirements are known as ‘safeguarding’.

Is there a chance I won’t get my money back? What is safeguarding?

Safeguarding is a key consumer protection measure within the EMRs and the PSRs. The purpose of safeguarding is to protect and return customer money if a firm was to fail.

Wirecard is required under the EMRs to maintain appropriate measures to safeguard customers money.  It does this by holding it separate from its own money in accounts with banks (or another credit institution).   Effective safeguarding arrangements are critical to help ensure that customers’ money is protected and returned if a firm fails. Adequate safeguarding arrangements which are compliant with the regulatory requirements are a condition of Wirecard’s ongoing FCA authorisation.

What should I do if I am a firm who outsources some operational functions to Wirecard?

Firms should contact their relevant Supervision contact to discuss the contingency plans they have in place. We have a dedicated Customer Contact Centre to give your firm a direct point of contact, email Firm.Queries@fca.org.uk

To note, we are currently consulting on new requirements on the firms we supervise to help strengthen their operational resilience including, the implications for operational resilience for firms using outsourcing and other third-party service providers. Find out more. We would also draw your attention to the EBA Guidelines on Outsourcing Arrangements which apply to e-money and payment firms.

What happens next?

The FCA has published requirements to the Register in respect of Wirecard and continue working with the firm to progress these matters.”


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Comments (196)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Alan says:

    Update from Curve just published re what’s happening – https://discover.curve.app/a/wirecard-whats-happened-what-it-means-and-how-were-fixing-it

    • Genghis says:

      You must have been busy on the boards today! I’d have expected something about what’s happening to those paying for a subscription.

      • Alan says:

        Yep – question has been asked a few times but no info yet. Can’t see how they will be able to charge for the time it’s out of action although of course if it ends up being only a couple of days it will be less of an issue.

    • Jimbob says:

      When an update isn’t an update………

      • Jimbob says:

        Doesn’t tell us anything new

      • Alan says:

        Haha yep I know, just thought worth posting though as it was an official update from them 😉

    • Andrew L says:

      What another farce from Curve and maybe the final nail in the coffin of a completely inept business. Clearly their previous statements about being up an running in-house by the 28th June just wasn’t true.

      Curve really have been caught with their pants around their ankles this time.

      Yes, other businesses have been affected by this, but no other mainstream card providers in the UK have!

      • Chris K says:

        My watch only makes it 26th to be fair. Given this goes right to the core of their ability to function as a company, I, for once, believe them when they say they’re working round the clock for a fix.

        • Andrew L says:

          Haha. Read the statement again. Does that really sound like they will be up and running again by the 28th?

          The concept of Curve has always been very good, especially Go Back in Time, but unfortunately, the people operating it are completely useless and unless that changes they are destined to fail.

          • J says:

            Don’t really get the hate for Curve. I’ve never had any problems – the product works fine for me, and although the email customer service format is a bit odd I’ve found them very helpful and quick to solve issues. It’s a useful concept and living abroad is great for being able to use my Hilton Barclaycard and avoid FX fees.

          • Craig says:

            Isn’t the main issue and reason it might not be up and running by the 28th now is that the *transition* from a provider to in house is now compromised, rather than them not having the ability to do it in house at the moment. I’m not expert but I imagine there are all sorts of “mappings” of process being set up and things being “switched” to ensure continuity from one source of transaction processing to another, now to find that one side of the “mapping” has disappeared.

            I am with J and not sure what all the hate is about

          • Doug M says:

            Agree. Curve is excellent, well it seems to me that way, unless of course you’re an investor 🙂

          • Lady London says:

            @Craig +1. I have no doubt Curve will sort it though. Although any transactions caught between the back to back @Genghis mentioned, and any recurring transactions due that fail, might have a very long tail (3-5 months?) to sort out. But on a going-forward basis I would expect Curve to get it sorted out relatively quickly.

      • MD says:

        @Andrew L
        What a ridiculously stupid take. Because Curve are totally responsible for Wirecard, right? Imbecile.

        • Dezbez says:

          I work in Risk Management (in financial services) and trying to be objective about the situation… Firstly I can’t believe that Curve doesn’t have a contingency plan for this (it would seem pretty rudimentary where your whole business model has 100% reliance on one third party). And secondly that the Regulators ie FCA hasn’t been more challenging about it (as well as any internal assurance functions eg Internal Audit). This is 101 stuff, not hindsight talking. Appreciate Curve was working on transitioning away but that seems like a strategic decision rather than contingency planning.

          • John says:

            What contingency plan can you come up with then?? It sounds like (if you believe curve) they did have a contingency plan which they were implementing which was supposed to be done by tomorrow.

          • David says:

            “I work in Risk Management (in financial services) and trying to be objective about the situation… Firstly I can’t believe that Curve doesn’t have a contingency plan for this (it would seem pretty rudimentary where your whole business model has 100% reliance on one third party). ”

            I’m sorry, you may work in Financial Services, but you clearly know nothing about cards.

            “This is 101 stuff,” – indeed it is, you need to do course 101 in how cards work as it’s clear you don’t understand the role of the parties, what is utterly normal setup.

        • Andrew L says:

          Not really, the guys running the joint are useless. Revolut haven’t had to cease trading today. What does that tell you? Please refer back to my first sentence…

          • Patrick says:

            You can’t have a contingency for everything.
            Utter non sense
            Actual risk managing is moving providers which was on it’s way. Given no customer money is linked tonthe card, that us actually good risk managenent.
            Also the real scandal here is the FCA who makes a fool of themselves. These cards are critical infrastructure and thus should be rung fenced operations and the regulator needs to step in instead of shutting it down. Extremely poor…

          • Secret Squirrel says:

            True, Revolut still running today. Curve should of been in place before this but we rely on good old curve for exotic transactions so we have to wait.

          • Doug M says:

            @AndrewL – Maybe if Curve were as structured and professional as you’d like them to be they’d be a lot less useful…….

    • Venting says:

      Wait, they are now Curve os Ltd?

  • Andrew L says:

    The introduction of ‘Curve Fronted’ introduced a lot of hate towards Curve.

    • J says:

      Those affected are mostly people trying to play the system though so Curve won’t miss them.

      • Luckyjim says:

        Does anybody else use curve? Their USP has always been to enable users to game the system.Use Amex at places that don’t take Amex, disguise a Credit card as a debit card etc.

        • Graeme says:

          The idea of ‘only having to carry one card’ has never really rung true for me. One, it really isn’t hard to carry two/three cards (I carry two of the cards my Curve is linked to as well as Curve!) and two, there’s no way I’d ever solely rely on Curve as it has problems way too often.

          • Eugene says:

            Yes. While there is the opportunity to use a curve in a debit card only vendor, those places are few and far between. But as to carry only one card? I have 6 or 7 on my phone. Can’t recall when I needed a physical card in most of the first world. Physical cards are dead men walking, tomorrow’s chequebooks.

          • Crafty says:

            It’s a proposition without the demand for one. Apple, Samsung and others have already gone a step beyond this for anybody who would actually find it useful.

          • John says:

            Chequebooks are very useful very rarely. Saved my house purchase for one

        • Secret Squirrel says:

          Amex? Long time ago now!

      • Andrew L says:

        The whole concept of Curve is to play the system, isn’t it? What else is it useful for??

        • J says:

          Avoiding FX charges while still earning non Amex points seems a legit use. Less cards to carry around – I would never rely on a smart phone given how poor my battery is…

          • Doug M says:

            Maybe consider a phone with a decent battery life.
            The weight and bulk of a couple of credit cards is hardly a game changer when you’re carrying a phone.

    • Ashish says:

      But this just down to Germany terrible lax regulations? To allow is terrible. Germany changed a lot.

      • J says:

        It is not that the regulations are lax though – there’s a major fraud scandal and now a criminal investigation.

        • Genghis says:

          BaFin has not exactly been a darling though:
          – inaction in some areas
          – banning short selling of Wirecard instead of tackling problem
          – them siding with Wirecard vs the FT investigation
          – wasn’t Wirecard classed as a tech co and not a FS co?
          I’m no expert on German regulations to say whether it’s the regulations themselves or application thereof but questions still need to be asked.

          • RWJ says:

            BaFin seemed to act to protect a German company that could appear to compete with US and UK fintechs, rather than actually investigate or regulate much!

    • Lady London says:

      That’s hat 🎩 now.

  • Nick says:

    If no one trusts Curve to be up and running all the time and therefore everyone has to carry a ‘backup’ card, their main business model is trashed. They can’t make money from a few ‘niches’ (such as HfPers and their MS), and mainstream users will very quickly lose trust. I’d be very pessimistic about Curve’s future.

    (Then again, I’ve never really seen the fuss anyway, and have been wrong before!)

    • TonyT says:

      Can’t quite see why HFP has got into the curve type of thing? The site really does well reporting core airline/hotel etc.. stuff. This whole “Curve Ball.” Is best left elsewhere with all due regard to commission

      • The Urbanite says:

        Some people use credit cards to generate hotel and airline points – Curve facilitates that and is therefore of interest to some readers on here.

      • Secret Squirrel says:

        Eh? This site revolves round airline / hotel loyalty points. Using Curve to generate this is not for this type of site??

    • Andrew L says:

      I don’t think that the credit card companies would lose any sllep if Curve were to fail.

      The only thing I would really miss is ‘Go Back in Time’ . That is now a great feature since they increased the benefit to £5,000 and the time you can go back to 3 months. Oh, and the money I pull out of cash machines a couple of times a month on mine & the wife’s cards.

      • Pat the Postie says:

        I can’t see mention of 3 months anymore just 14 days

        • Andrew L says:

          It changed in April to 3 months and from under £1,000 to under £5,000.

        • Andrew L says:

          Here you go Pat the Postie. This has been lifted from Curve’s help pages….

          Which transactions can I move with Go Back in Time?

          You can move any of your transactions onto any of your payment cards that are added and verified with Curve. It’s worth noting that you can’t move transactions to or from your Curve Cash card.

          Also, to move a transaction, it must be less than 90 days old, under £5000, completed and not pending and you can’t have used Go Back in Time on it before.

          • Pat the Postie says:

            yes I read that but site still shows old info, doesn’t seem to be implemented. Has it worked for you?

          • Andrew L says:

            Yes, it works perfectly well….until this afternoon, of course.

    • CV3V says:

      How about paying Amex bill by Curve linked to Lloyds Avios credit card? I earn a good few thousand Avios per year at no cost. I can spell this method out now as it is being closed down! Sure there are other methods too.

  • Dave Winchester says:

    Migrating all of that under sudden and immediate time pressure – spare a thought this weekend for the Curve dev team who are likely sleeping at the office.

  • Andrew L says:

    They’ll be fine with the air conditioning and the endless take out pizza! 🤣

    • @mkcol says:

      Why on earth would they need aircon this weekend? Presuming they’re in the UK.

  • Will says:

    Think we can give curve a break here.
    They relied on a DAX 30 listed company with an FCA license to process payments.

    It turns out that they somehow managed to convince shareholders, EY, Bond holders and regulators that they had almost 2 billion euros that didn’t exist.

    To all the curve critics, is every company who contracts out to an FCA licensed 3rd party expected to do more due diligence than the FCA to ensure the FCA license is issued correctly? What’s the point in the FCA in that case.

    • Roy says:

      And, to Curve’s credit, they saw the problem and were well advanced in their plans to ditch Wirecard.

      • NigelthePensioner says:

        Ah well, maybe they can use “Creation Bank” for whatever it is they need? That should be very scarey for all Curve-ites!
        They need to get AmEx back on board to be worthwhile IMHO. Then, they need to go in-house and THEN (and only then) they would have a great product. Until then, you will all have to look elsewhere for your metal card! :- ))

        • old bob says:

          Look on the Brightside eh Nige, As a fellow pensioner, we need something to moan about!

      • Axel says:

        The way I see it Curve are standing at the flight gates being told they’ve missed final boarding.

        Curve had over two years to move their processors or create a contingency. The FT has been onto Wirecard for years and years. The German authorities know Wirecard execs are hiding funds in Labuan. The DAX should be ashamed of this.

        The Curve management are young and naive. They didnt understand how Amex’s were used by old hands for example, as they probably had bever churned one.

  • Erika says:

    I have a Payoneer Master card issued by Wirecard and now it’s frozen and I’m a freelancer and won’t be able to get paid for the next few … weeks? months? who knows.

  • memesweeper says:

    I’ve been a long time Curve user. I used to enthusiastically promote it, but with Curve fronted it’s core USP now requires an investment that is hard to sell the benefits of, apart from niche use cases. I am in one of the niches, so in my circumstances (untill yesterday) it served me well, although I’ve found the customer service patchy.

    It’s really not their fault they bet the farm on wirecard. It was an apparently legitimate business, and they had plans to move away as they reached the scale necessary to make that an affordable and sensible next step. Trouble for them might be that migrating cleanly away from a card provider like Wirecard might involve data and other support that Wirecard can no longer give now Wirecard is insolvent — even if Curve are only days away from migrating. This insolvency is likely to kill stone dead many companies and services built on Wirecard and I really hope Curve isn’t one of them.

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