On 30 Sept 2020, the Monetary Authority of Singapore (MAS) has directed Wirecard entities to cease their payment services in Singapore. The entities have been instructed to return all customers’ funds by 14 Oct.
Wirecard, a German digital payments company, filed for bankruptcy in June after disclosing that €1.9 billion (S$3 billion) of cash, supposed to be in bank accounts in the Philippines, did not exist. Wirecard’s primary business activities in Singapore were to process payments for merchants and help firms issue pre-paid cards.
Entities under Wirecard are not currently licensed by MAS. The Payment Services (Exemption for Specified Period) Regulations 2019, which were made under the Payment Services Act 2019, provide a grace period ranging from six months to a year for firms providing certain regulated payment services to apply for the relevant licence. During this grace period, such firms may provide the regulated payment service without a licence and the MAS may issue directions to them. The Payment Services Act (PSA) that came into effect on 28 Jan 2020, regulated payment services such as merchant acquisition services, and services which were already under previous legislation, like money-changing and cross-border money transfer services.
In a statement issued by MAS, they said that it has been closely monitoring the impact of Wirecard AG’s insolvency on the ability of Wirecard SG to continue providing payment services in Singapore. MAS noted that Wirecard SG told the authority that it was unable to continue providing payment processing services to a significant number of merchants. Hence, MAS assessed that it was in the interest of the public for Wirecard SG to cease its payments services and promptly return all customers’ funds.
The MAS has encouraged customers who have not yet made alternative arrangements to do so promptly, and for merchants to look to other payment processing service providers. Besides Nets, banks such as DBS, United Overseas Bank and OCBC provide merchant acquisition services.
Date: 1 Oct 2020
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