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MAS orders Wirecard to stop payment services in Singapore

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The latest directive by the Monetary Authority of Singapore (MAS) for Wirecard entities in Singapore (Wirecard SG) to cease their payment services here comes as thousands of merchants in Singapore are users of Wirecard's payment terminals here.

Singapore

THE latest directive by the Monetary Authority of Singapore (MAS) for Wirecard entities in Singapore (Wirecard SG) to cease their payment services here comes as thousands of merchants in Singapore are users of Wirecard's payment terminals here.

This may prompt uncertainty over the scale of payment disruption to come, though to be sure, after news of the firm's collapse first surfaced in June, some have already found alternative service providers, The Business Times understands.

With the latest directive, these entities also have to return all customers' funds by Oct 14.

It comes as Wirecard told MAS that it was unable to continue providing payment processing services to a "significant" number of merchants, said the regulator in a statement on Wednesday. The regulator said it has assessed that it is in the interest of the public for Wirecard SG to cease its payments services and promptly return all customers' funds.

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"This provides the greatest certainty to customers on their appropriate course of action, including seeking alternative service providers," said MAS. It is unclear exactly how many affected merchants here have made alternative arrangements.

Germany-based Wirecard, which is present in 11 markets in Asia-Pacific, collapsed into insolvency in June after admitting that 1.9 billion euros (S$3.04 billion) in cash was missing from its books.

In Singapore, its primary business activities in Singapore were to process payments for merchants and help firms issue pre-paid cards.

With the suspension of its services here, credit card payments at merchants using Wirecard SG's services, as well as usage of pre-paid cards issued by Wirecard SG, will be affected. Customers are expected to make alternative arrangements. Other forms of e-payments such as Nets, PayNow and SGQR continue to be available.

UOB, as the largest acquirer in Singapore, told BT it has been speaking to "many new merchants" over the last two months. The bank has been addressing queries from businesses seeking more certainty around their payment processing options or to join UOB's merchant network, said Choo Wan Sim, UOB head of cards and payments in Singapore.

These merchants come from a range of sectors including retail, e-commerce, supermarket, food and beverage and insurance.

Checks by BT showed that as at Wednesday late night, Wirecard Asia Holding remains a live company in Singapore.

MAS said it has been monitoring the impact of Wirecard AG's insolvency on the ability of Wirecard SG to continue providing payment services in Singapore.

MAS has also closely engaged Wirecard SG in recent months to safeguard the interest of Wirecard SG's customers. This includes requiring Wirecard SG to keep customers' funds in banks in Singapore and to assist customers to switch to alternative service providers.

Wirecard became a well-known payments player in the Asia-Pacific region after acquiring the customer portfolio of Citigroup's merchant acquiring business.

Following the announcement in 2017, Wirecard said that its portfolio of clients in Singapore, Hong Kong, Macau, Malaysia, Taiwan, Indonesia, the Philippines, Thailand, India, Australia and New Zealand translated to more than 20,000 merchants in the region.

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