Railsbank has confirmed its intent to acquire the UK arm of disgraced Germany payments processor Wirecard.
The buy-out, confirmed by Sifted, ends a tumultuous period for Wirecard's UK business, which sent shudders through the fintech industry after it was temporarily shut down by the Financial Conduct Authority.
Railsbank will now acquire the remaining assets of Wirecard Card Services, clients and a number of employees, according to people briefed on the matter. London-based Railsbank confirmed to Sifted it had given a purchase term sheet to WCS, set to be finalised in November, but declined to comment on the amount.
A Wirecard spokesperson tells Finextra: “We are aware of recent press coverage around a potential transaction with Railsbank Technology Ltd. We are continuing our discussions with Railsbank, but no final transaction documents have yet been agreed. We are also continuing to work on other contingency planning for the business. We expect to be able to comment further in due course. In the meantime, the company is processing card transactions as usual.”
WCS once settled card payments for approximately 70 UK clients, many of whom have since moved off the platform after becoming mired in the accounting scandal engulfing the now insolvent German parent.
In the wake of Wirecard's demise, Nigel Verdon, Railsbank co-founder and CEO, called on the industry and regulators to introduce new provisions for material outsourcers such as card issuing platforms as a further safeguard to protect client money.
The breakup of Wirecard by the company's administrator is picking up pace, with news of the UK deal coinciding with the sale of the payment processor's Brazilian operations to PagSeguro.
The process of selling its North American operations are also well advanced with a deal expected “shortly”, the administrator said.