Kiffmeister’s FinTech Daily Digest (06/26/2020)

Wirecard: the cryptocard consequences
Wirecard Card Solutions, Wirecard’s UK subsidiary, supports a number of crypto cards, among them those issued by TenX and With most of these cards being rendered unusable by the Wirecard revelations, many of these entities will once again be “looking for alternative solutions to ensure customers can continue using their cards”. Whether any other corporate will be as keen to step in to bridge the gap this time around, is harder to determine.

EU opens Apple antitrust investigations into Apple Pay practices
The European Commission is opening an antitrust investigations into Apple’s Apple Pay practices to assess whether Ait violates EU competition rules. Apple has limited access to the Near Field Communication (NFC) functionality of its iPhone and Apple Watch devices, a move that means banks and other financial service providers can’t offer NFC payments through their own apps. It also reserves the ‘tap and go’ functionality of iPhones to Apple Pay.  Apple Pay accounts for about 5% of global card transactions and is on pace to handle 1-in-10 such payments by 2025.

The true cost of killing off cash
Cash use is in decline, a trend that has been accelerated by the coronavirus pandemic. Advocates for physical cash argue that the demise of physical cash risks leaving vulnerable members of the population behind. A University London College study suggests that CBDCs will need to replicate the privacy and anonymity of physical cash to achieve widespread acceptance. It argues that CBDCs incorporating privacy by design will be seen as more free and business-friendly than those that rely upon data protection by third parties.

Brussels to call for probe into German regulator over Wirecard
Brussels will call for a probe into whether BaFin, Germany’s banking regulator, failed in its supervision of Wirecard, warning that the payment company’s collapse poses a threat to investor trust in the EU. Valdis Dombrovskis, the EU’s executive vice-president in charge of financial services policy, said the EU should be prepared to pursue a formal investigation into the German regulator for “breach of union law” if the preliminary probe by the European Securities and Markets Authority discovered shortcomings in BaFin’s upholding of EU rules on financial reporting.

Customer funds frozen at Wirecard UK after FCA steps in
The U.K. Financial Conduct Authority (FCA) ordered Wirecard UK to cease all regulated activity after the parent company filed for insolvency in Germany. Wirecard Card Solutions Limited is authorised and supervised by the FCA to issue e-money and provide payment services including, issuing e-money onto prepaid cards. The FCA immediately placed requirements that it should not pay out or reduce any money it holds for its customers except on their instructions.

EY failed to ask for Wirecard bank statements for 3 years
EY failed for more than three years to request crucial account information from a Singapore bank where Wirecard claimed it had up to €1bn in cash — a routine audit procedure that could have uncovered the vast fraud at the German payments group. EY said that there were “clear indications that this was an elaborate and sophisticated fraud, involving multiple parties around the world in different institutions, with a deliberate aim of deception”. The company argued that “even the most robust audit procedures may not uncover this kind of fraud”.

Posted from Diigo: