- Wirecard filed for insolvency amid scandal, and now payments players are looking to take over portions of its business.
- Firms are looking to acquire portions of Wirecard’s business in the hopes of picking up some of its tramnsaction volume.
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The major European processor filed for insolvency in June amid scandal, and now payments players are looking to take over portions of its business or steal its partners in the hopes of boosting their own performances.
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- Wirecard is set to sell its Brazilian and UK businesses, and there’s interest in other segments, too. PagSeguro Digital, a payments provider in Brazil, agreed to acquire Wirecard Brazil to build out its solutions and payments volume. Meanwhile, UK-based Banking-as-a-Service (BaaS) provider Railsbank is positioned to bring in Wirecard’s UK payments card technology, customers, and some employees, per the Financial Times. And Wirecard is reportedly close to selling its North American operations and its core processing business in Germany. This suggests firms are interested in bringing in Wirecard’s assets despite the scandals surrounding the firm, likely because these assets can grant firms access to Wirecard’s capabilities, technologies, and clients, helping them almost instantly build out their operations and payments volume.
- Adyen has also won over former Wirecard clients, offering an alternative method of benefiting from Wirecard’s plight. Adyen is in talks with several Wirecard customers about switching over to its services, and some are already using its offerings, per Bloomberg. This offers Adyen the opportunity to garner more payments volume and revenue, so it and other processors may put a lot of effort into recruiting Wirecard’s partners like Klarna, UnionPay, and SES-imagotag. Wirecard’s clients may be looking to jump ship because Mastercard and Visa previously informed some Wirecard clients that they may stop allowing Wirecard to process payments, and changing processors would allow firms to avoid any potential issues.
These developments illustrate that firms can target Wirecard’s business by either acquiring its business or targeting its clients, but those positions are in direct competition with each other. Wirecard reported €124.2 billion ($146.4 billion) in transaction volume in the first three quarters of 2019, making its business a valuable target.
Firms are looking to acquire portions of Wirecard’s business in the hopes of picking up some of this volume, but they may lose out on some clients if Adyen and other firms continue to poach their existing customers. Meanwhile, competing firms may have more trouble stealing Wirecard’s customers because clients may prefer to stick with their existing Wirecard services once they’re acquired by an outside firm that’s unrelated to Wirecard’s scandal. Ultimately, this conflict will make it difficult for firms to fully capitalize on Wirecard’s demise, but processors will still likely pick up some new key clients and bolster their performances.
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