Mastercard and Visa reportedly reconsider their relationship with Wirecard following accounting scandal

Mastercard and Visa reportedly reconsider their relationship with Wirecard following accounting scandal

Mastercard (MA) and visa (V) have notified some Wirecard customers that the company’s access to their payment networks may be revoked, Bloomberg reported, citing people familiar with the matter.
Nor a credit card company commented directly on the report, but both said they were closely monitoring the situation. The loss of two of the largest payment networks in the world would be another blow to Wirecard, which earns revenue by helping businesses process payments from customers.

“We continue to closely monitor developments and evaluate new information when it becomes available,” a Visa spokesman said in an email statement. “Our priority is and always will be to maintain the integrity of the Visa payment system and to protect the interests of consumers, merchants and our customers.”

Similarly, Mastercard said in a statement that it follows the news from Wirecard. “Our priority is to give people the opportunity to continue using their cards. We will continue to work with all parties and we are ready to take all necessary actions, “said Mastercard.

Wirecard did not immediately return a comment request for this article. However, in a statement on monday, Wirecard said that “to avoid misunderstandings, the company wants to inform that its IT systems continue to work without restrictions.”

Founded in 1999, Wirecard was once considered one of the most promising technology companies in Europe. It processes payments for consumers and businesses and sells data analysis services. The company has nearly 6,000 employees in 26 countries around the world.

But in recent days, Wirecard has been plagued by a scandal over accounting irregularities that have made comparisons. Enron, the US energy giant, filed for bankruptcy in 2001.
Wirecard CEO Marcus Brown resigned last week after an auditor discovered this The $ 2 billion in cash appears to have disappeared from the company’s reports, delays in publishing the financial results of the technology company for 2019 and sparks for fraud allegations. Then on Monday, Wirecard admitted that after “further research,” the missing $ 2 billion probably never existed.
Brown, who helped Wirecard grow into one of Germany’s largest companies, was arrested the next day on suspicion of inflating Wirecard’s balance sheet and sales through fraudulent transactions to make it more attractive to investors and customers.

The company is now in a crisis that would worsen if large payment networks canceled their access.

Since last week, the value of Wirecard shares has fallen by more than 96%. Wirecard filed for bankruptcy Thursday due to over-indebtedness.

Charles Riley contributed to this report.

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