Bust German fintech business Wirecard (WDI.DE) is seeking to transfer its UK operations to fintech Railsbank.
Wirecard’s UK subsidiary said on Friday it had reached an agreement to sell its operations to Railsbank as part of a solvent wind down of Wirecard’s UK business.
Wirecard runs card and payments operations for fintech businesses like ANNA Money and Pockit. These agreements are managed through third parties that license Wirecard’s technology in the UK and these so-called “programme managers” must approve the Railsbank deal for it to go through.
A spokesperson for Wirecard declined to comment on the timeline for approval and declined to comment on the financial terms of the deal.
Wirecard directly employs around 80 people in the UK and hopes most will be transferred to Railsbank. However, the spokesperson said there may be redundancies. Wirecard began laying off around half of its employees in Germany earlier this week.
If the deal is approved, Wirecard hopes to transfer all its UK business to Railsbank by November.
“We are delighted to have come to this agreement with Wirecard Card Solutions and thank its team for working positively with us during the process,” Railsbank chief executive and founder Nigel Verdon said in a statement.
“At the end of the day, customer and team needs are our priority. The Railsbank team will conscientiously work on ensuring customers, programme managers and team members have a seamless transfer to their new home.”
The sale of Wirecard’s UK business follows the spectacular collapse of the German parent company earlier this year. A €1.9bn (£1.7bn, $2.3bn) hole was discovered on the company’s balance sheet, leading to the company’s bankruptcy and the arrest of key management on fraud charges. The company’s chief operations officer Jan Marsalek has been placed on Interpol’s wanted list after disappearing.
The scandal caused disruption for Wirecard’s UK customers. Britain’s finance watchdog froze all the company’s assets in the wake of the collapse, leaving customers who relied on its technology unable to access their money. The freeze, which lasted several days, was “to protect the interests and money of consumers who use Wirecard,” the regulator said at the time.
Tom Jennings, managing director of Wirecard’s UK business, said: “In planning the future of the company, one of our key priorities continues to be that our valued customers get the best possible outcome. We believe that our solvent wind-down proposal, including the proposed sale of assets to Railsbank, will achieve that key priority.
“Our hope is that our programme managers will support our proposal and we can move forward in a positive way for all parties.”
London-based Railsbank was founded in 2016 and provides behind-the-scenes banking services and technology to companies. It already operates around 50 card programmes across the UK, EU, US, and Singapore.