Overview

Wirecard AG was a German payment-processing and financial-services company headquartered in Aschheim near Munich. Founded in 1999, it initially provided technical processing for online merchants and later developed into an international payments platform offering merchant acquiring, payment-method integration, risk management, card issuing, mobile payments and related financial-technology services. Its early customer base reportedly included online gambling and adult-entertainment businesses, but the company subsequently repositioned itself as a mainstream provider for e-commerce, travel, transport, retail and mobile payments. Wirecard became a public company through a reverse merger with the already listed information-services business InfoGenie AG. The transaction, completed in 2005, gave Wirecard access to the stock market and was followed by a period of aggressive international expansion. The company established Wirecard Asia Pacific in Singapore in 2007, introduced virtual prepaid cards in 2008, expanded its fraud-prevention capabilities in 2009 and entered additional markets through acquisitions and partnerships. It acquired Prepaid Card Services from Citigroup in 2016, expanding its presence in the United States, and acquired a Brazilian internet-payment provider during the same year. In 2019 it received investment from SoftBank and acquired Beijing-based AllScore Payment Services, extending its reach into China. Wirecard’s public profile rose sharply as it claimed to process payments for hundreds of thousands of businesses. Its services covered online checkout, point-of-sale acceptance, alternative payment methods, virtual cards, supplier and commission payments, mobile wallets and transaction-risk controls. The company also marketed Boon, a digital payment application built around a virtual Mastercard and designed for smartphone, contactless, online and peer-to-peer payments. Wirecard was included in the TecDAX in 2006 and entered Germany’s DAX index in September 2018, reinforcing its reputation as one of Europe’s leading fintech companies. Questions about Wirecard’s accounting and business model, however, had circulated for years. Investigative reporting, whistleblower accounts, short-seller research and allegations concerning its Asian operations increasingly challenged the company’s reported profits and cash balances. Wirecard generally rejected the accusations and, at various points, sought legal or regulatory action against critics and journalists. A special investigation by KPMG in 2020 was unable to verify all of the allegations because it said it had not received sufficient documentation. Ernst & Young subsequently declined to sign off on the company’s 2019 accounts after failing to confirm approximately €1.9 billion supposedly held in trustee accounts. The crisis culminated in June 2020. Wirecard disclosed that the €1.9 billion could not be located and acknowledged that the money probably had never existed. Chief executive Markus Braun resigned and was arrested, while chief operating officer Jan Marsalek was dismissed and became a fugitive. Wirecard filed for insolvency on 25 June 2020, citing over-indebtedness. The insolvency administrator later cut hundreds of jobs and terminated the contracts of the remaining management board. In November 2020, the principal operating business was sold to Santander for €100 million, while several overseas units had already been sold or otherwise separated. The collapse prompted criminal proceedings, parliamentary scrutiny in Germany and regulatory criticism concerning the company’s auditors, financial supervision and corporate governance. Wirecard is therefore remembered both as a major early European fintech platform and as the central company in one of Germany’s most consequential corporate-fraud scandals.

History

Wirecard was established in 1999 as a technical payment processor for internet merchants. During the company’s early years, its customers were concentrated in higher-risk online sectors, including gambling and adult entertainment. Markus Braun joined in 2002 after providing capital and became chief executive, consolidating the business around internet payment services as the dot-com market deteriorated. The company became publicly traded through a reverse merger. InfoGenie AG, a listed Berlin information-services company, merged with the privately held Wirecard business through a capital increase in kind in 2005 and changed its name to Wire Card. This structure allowed the payments company to obtain a public listing without a conventional initial public offering. Wirecard later entered the TecDAX in 2006 and, after rapid growth in market value, joined the DAX in September 2018. Internationalization was central to its development. Wirecard Asia Pacific was established in Singapore in 2007. The company added virtual prepaid cards in 2008 and introduced a fraud-prevention suite in 2009. It expanded into New Zealand, Australia, South Africa and Turkey in 2014. The acquisition of Prepaid Card Services from Citigroup in 2016 strengthened its United States operations, while a Brazilian acquisition expanded its South American presence. Wirecard also built a mobile-payments business around Boon, a digital wallet using a virtual Mastercard and supporting contactless, online and peer-to-peer transactions. In 2019 it received investment from SoftBank and acquired AllScore Payment Services in Beijing. Wirecard described itself as an integrated payment and risk-management platform. It combined payment-method integration, acquiring, transaction processing, card issuing, point-of-sale acceptance and fraud controls. Travel and transport were important verticals: the company handled payment or credit-control services for businesses including TUI and KLM and promoted virtual-card tools for supplier and commission payments. By 2018 it claimed relationships with roughly 280,000 companies, although the scale and quality of reported business became central issues in later investigations. Concerns about Wirecard’s accounting and corporate structure appeared well before the 2020 collapse. FT Alphaville questioned the company’s business model in 2015, the Zatarra report in 2016 alleged fraud and money laundering, and German business media continued to raise questions in subsequent years. Wirecard responded forcefully, and German authorities investigated some of its critics for alleged market manipulation. Those cases were dropped in 2020. The company’s conflict with the Financial Times escalated in 2019 after reports alleged accounting manipulation and irregularities in the Asia-Pacific business. BaFin temporarily restricted short selling in the shares, while criminal inquiries also focused on the reporting and market conduct surrounding the dispute. Wirecard hired KPMG to conduct a special investigation in 2019–2020. KPMG said it could not obtain sufficient evidence to resolve every allegation. The company nevertheless continued to work toward publication of its annual accounts. In June 2020, Ernst & Young could not verify €1.9 billion that Wirecard said was held in trustee accounts. The company disclosed that the funds were missing and later said they likely never existed. Braun resigned, James Freis became interim chief executive, and Marsalek was dismissed after being unable to explain the disputed balances. Braun was arrested, while Marsalek disappeared and remained wanted by German authorities. Wirecard filed for insolvency on 25 June 2020. Its British subsidiary temporarily faced restrictions from the Financial Conduct Authority, and Singapore’s monetary authority later directed the local branch to stop payment services and return funds owed. The insolvency administrator announced major job cuts and removed the remaining management board. Santander acquired the core operating business in November 2020 for €100 million; other regional operations were sold or dealt with separately. The collapse led to criminal proceedings against former executives and an extensive German parliamentary investigation into auditing, supervision, political oversight and corporate governance. The company’s former senior legal counsel in Singapore, Pav Gill, later identified himself as a whistleblower whose material had helped Financial Times journalists investigate the alleged fraud. Wirecard’s history consequently spans the rise of European fintech, aggressive cross-border expansion, prolonged challenges to its reporting and the failure of a once prominent listed company.

2020
Accounting crisis and insolvency
[1]Wirecarden.wikipedia.org
The company cannot locate €1.9 billion in reported cash, its CEO resigns, and Wirecard files for insolvency.
2020
Core payments business sold to Santander
[1]Wirecarden.wikipedia.org
The insolvency administrator sells the main operating business to Santander for €100 million.
2019
SoftBank investment and continuing investigative scrutiny
[1]Wirecarden.wikipedia.org
Wirecard receives SoftBank investment while Financial Times investigations intensify questions about its accounts and Asian business.
2018
Wirecard enters the DAX
[1]Wirecarden.wikipedia.org
The company joins Germany’s DAX index in September.
2016
Expansion through United States and Brazil acquisitions
[1]Wirecarden.wikipedia.org
Wirecard acquires Prepaid Card Services from Citigroup and a Brazilian internet-payment provider.
2007
Wirecard Asia Pacific is established
[1]Wirecarden.wikipedia.org
Singapore becomes a base for the company’s Asia-Pacific expansion.
2006
Admission to the TecDAX
[1]Wirecarden.wikipedia.org
Wirecard is included in Germany’s technology-focused TecDAX index.
2005
Reverse merger creates the listed Wire Card
[1]Wirecarden.wikipedia.org
Wirecard merges with listed InfoGenie AG through a capital increase and obtains a public-company structure.
2002
Markus Braun joins as chief executive
[1]Wirecarden.wikipedia.org
Braun provides capital, becomes CEO and consolidates the business around online payment services.
1999
Wirecard is founded
[1]Wirecarden.wikipedia.org
The company begins as a technical processor for internet-based merchants.

Products and positioning

A global fintech and payment-infrastructure provider serving online merchants, retailers, travel businesses, financial institutions and mobile-payment partners.

Payment processing · 1999
Wirecard payment-processing platform
The company’s principal platform integrated card and alternative payment methods for online merchants and physical points of sale. It combined acquiring, transaction routing, settlement support and merchant-facing payment technology, with particular emphasis on e-commerce, travel, transport and retail.
Mobile payments · 2015
Boon
Boon was a digital payment application based on a virtual Mastercard. It supported smartphone and tablet payments, NFC contactless transactions, online purchases and peer-to-peer transfers, with availability varying by country and compatibility with selected mobile-wallet ecosystems.
Cards · 2008
Virtual prepaid and payment cards
Wirecard issued and processed virtual and physical prepaid or payment cards for consumer, corporate and partner use. These products supported online transactions and could also be used in white-label or embedded-payment arrangements.
Risk management · 2009
Fraud prevention suite
The fraud-prevention offering provided transaction screening and risk-management tools intended to identify suspicious payment activity and help merchants control chargebacks and payment fraud.
Business payments
Supplier and Commission Payments
This travel-oriented service used automatically generated virtual cards to make electronic payments to suppliers and business partners, including commission and settlement payments.

Controversies

2020
Missing €1.9 billion and accounting-fraud scandal
Wirecard acknowledged that approximately €1.9 billion supposedly held in trustee accounts could not be verified and likely never existed. The disclosure precipitated executive resignations, arrests, insolvency and investigations across several jurisdictions.
Source
2020
Wirecard auditor reports missing evidence for €1.9 billion
Wirecard's designated auditor stated that it could not find audit evidence for €1.9 billion. In connection with this, Wirecard's former CEO said it was unclear whether fraudulent transactions to the company's detriment had occurred. The event concerns the auditor's reported inability to locate audit evidence for the stated amount and the former CEO's comment on whether harmful fraudulent transactions had taken place.
Source
2020
Authorities investigate Wirecard's accounts
German regulators and prosecutors were investigating Wirecard's accounts over whether the company used fictitious revenue to inflate sales and mislead investors. Munich prosecutors said a team searched three properties in Munich and two in Vienna on Wednesday, July 1, 2020.
Source
2019
Financial Times investigations and retaliation controversy
Investigative reporting and whistleblower material alleged accounting irregularities in Wirecard’s Asian operations. The company denied the allegations and pursued complaints against the newspaper and critics, while German authorities investigated aspects of the dispute.
Source

Brand decisions

2020
Insolvency filing and business restructuringStrategy
Background
The company could not verify a reported cash balance of €1.9 billion and acknowledged severe over-indebtedness.
Action taken
Wirecard filed for insolvency, replaced or removed its management, cut staff and marketed operating assets for sale.
Aftermath
Santander acquired the core business for €100 million, while the corporate group was dismantled and criminal proceedings followed.
Reported missing cash; debt. €1.9 billion missing; €3.2 billion debt (2020)
Source
2015
Launch of Boon mobile paymentsProduct launch
Background
Wirecard sought to extend its payment infrastructure into consumer-facing mobile wallets.
Action taken
It introduced Boon, a virtual-Mastercard-based application for mobile, online, contactless and peer-to-peer payments.
Aftermath
Boon became one of Wirecard’s most visible consumer products before the group’s insolvency ended the service.
Source
2005
Reverse merger with InfoGenie AGM&A
Background
Wirecard needed a public-company structure after its early private-company development.
Action taken
The business merged with listed InfoGenie AG through a capital increase in kind and adopted the Wire Card name.
Aftermath
The transaction enabled Wirecard to trade publicly and supported its later expansion in German equity markets.
Source

Overview

History

Products and positioning

Controversies

Brand decisions

Sources27 sources