Wirecard
| Company type | Public (Aktiengesellschaft) |
|---|---|
| Industry | Financial services, payment processing |
| Founded | 1999 |
| Founder | Markus Braun (capital infusion and CEO from 2002) |
| Defunct | November 2020 |
| Fate | Insolvency declared; primary operations sold to Santander Group |
| Headquarters | Aschheim, Germany (implied by typical headquarters location, but not explicitly stated) , Germany |
Area served | Global |
Key people | Markus Braun (former CEO), Jan Marsalek (former COO), James Freis (interim CEO after Braun) |
| Products | Electronic payment processing, risk assessment solutions, physical and virtual payment cards, mobile payment systems (e.g., Boon) |
Number of employees | Approx. 3,000 before workforce reduction (730 jobs cut in 2020) |
| Parent | None |
Wirecard AG was a German-based financial services company specializing in payment processing, which ultimately declared insolvency amid a significant accounting fraud scandal. Several top executives, including the former CEO, COO, and two board members, faced criminal indictments. In June 2020, Wirecard disclosed a €1.9 billion discrepancy in cash balances alongside debts amounting to €3.2 billion. By November 2020, the firm was dissolved after its primary operations were sold to Santander Group for €100 million, while other regional divisions were offloaded for undisclosed sums. Wirecard’s offerings encompassed electronic payment processing, risk assessment solutions, and the issuance of both physical and virtual payment cards. It was publicly traded on the Frankfurt Stock Exchange and was part of the DAX index from September 2018 until its removal in August 2020.
The company became the center of an international financial fraud controversy fueled by persistent accusations of accounting irregularities. These concerns escalated in 2019 following investigative journalism by the Financial Times and revelations from whistleblowers. On 25 June 2020, Wirecard filed for insolvency after confirming that €1.9 billion was unaccounted for. CEO Markus Braun stepped down and was subsequently arrested; meanwhile, former COO Jan Marsalek vanished and remains on Europe’s Most Wanted list.
By August 2020, insolvency administrators had stabilized company operations but announced extensive workforce reductions, including approximately 730 staff members and all executive board officials, as part of restructuring efforts to maintain business continuity. In March 2022, prosecutors formally charged Braun with fraud, breach of trust, and manipulation of financial records—offenses that could result in up to 15 years imprisonment. Braun remained in pre-trial detention at Stadelheim prison pending legal proceedings.
Founding and initial business focus
Established in 1999, Wirecard originally provided technical support for credit card payment processing primarily to online merchants within adult entertainment and gambling sectors. After the dot-com bubble collapse in 2002 threatened its survival, Markus Braun infused capital into the company and assumed the CEO role, shifting the business model toward internet-based payment services predominantly serving pornography and gambling websites.
Public listing and connection with InfoGenie AG
Wirecard entered public markets through a reverse takeover by merging with InfoGenie AG, a Berlin-based information services firm listed on the Neuer Markt since 2000. When InfoGenie’s share price plummeted to penny stock levels, Deutsche Börse attempted to delist it but was prevented by a court ruling in 2002. In December 2004, InfoGenie merged with Wirecard through a capital increase via contribution in kind and subsequently rebranded as Wire Card on 1 January 2005. The company joined the TecDAX index in 2006 before advancing to the DAX in September 2018.
Global growth
In 2007, Wirecard Asia Pacific was established in Singapore. The following year saw Wirecard launch virtual prepaid credit cards tailored for online transactions, followed by the introduction of a fraud prevention platform in 2009. By 2014, Wirecard had expanded into markets such as New Zealand, Australia, South Africa, and Turkey. Its acquisition of Prepaid Card Services from Citigroup in 2016 marked its entry into the U.S. market. That same year also included acquiring a Brazilian online payments company to establish a foothold in South America. In 2019, SoftBank made an investment in Wirecard. Additionally, Wirecard entered China by acquiring AllScore Payment Services based in Beijing during that year.
Scandal and insolvency
Starting in April 2015, the Financial Times blog FT Alphaville raised doubts about Wirecard's business operations and criticized its financial reporting methods.
In February 2016, the extensive 101-page "Zatarra Report" outlined accusations of fraud and money laundering involving Wirecard. The report was co-authored by British short sellers Fraser Perring from Viceroy Research and Matthew Earl of ShadowFall, and submitted to Germany's financial regulator, BaFin. At Wirecard’s request, BaFin alongside Bavarian prosecutors launched criminal probes targeting Perring and others for alleged market manipulation; these investigations were eventually dropped in March 2020. Subsequently, in February 2017, Manager Magazin published claims regarding deceptive reporting practices.
On 30 January 2019, Wirecard’s stock value sharply declined following a Financial Times exposé alleging that a senior executive was suspected of "account falsification," "money laundering," and round-tripping within its Asia-Pacific operations. Wirecard denied these accusations and initiated legal action against the Financial Times for unethical journalism and market manipulation. Meanwhile, Munich prosecutors opened an investigation into journalist Dan McCrum. BaFin imposed a short-selling ban on Wirecard shares from 18 February to 18 April 2019, citing a need to shield the market from speculative trading rather than taking a stance on the allegations. In October 2019, the Financial Times released purported internal accounting spreadsheets.
Amid mounting allegations in 2019, Wirecard engaged KPMG to conduct an independent audit. By March 2020, Wirecard announced that KPMG found no irregularities; however, in April KPMG stated that the company had not provided sufficient documentation to resolve all concerns, triggering a 26% drop in share price. Hedge funds such as London-based TCI lodged criminal complaints against Wirecard. On 5 June 2020, authorities raided Wirecard’s headquarters to investigate possible false statements made by CEO Markus Braun and other board members concerning the audit. On 18 June, following an audit by Ernst & Young, Wirecard revealed that €1.9 billion was missing from its accounts. Braun resigned the following day and was succeeded by James Freis. Over two days, the company’s shares plummeted by 72%. On 22 June, Braun was arrested on suspicion of inflating sales figures using fictitious revenue. Freis stepped down after serving as CEO for only 85 days in September 2020.
In January 2020, despite ongoing issues, Wirecard proposed extending CEO Markus Braun’s contract while its long-serving chairman stepped down. An Ernst & Young auditor uncovered attempts to mislead auditors, delaying the release of the 2019 financial results. Wirecard stated it was cooperating closely with auditors to resolve outstanding issues.
The revelation of the missing €1.9 billion in June 2020 caused shares to collapse by over 72%, prompted Braun’s resignation, and led to Freis’s interim appointment as CEO. The management board later declared that the funds likely never existed. Two Philippine banks purportedly holding these funds denied any such deposits. On 19 June, Moody’s downgraded Wirecard’s credit rating to B3 and completely withdrew it three days later.
A criminal probe commenced on 22 June with Braun’s arrest occurring that same day. On 25 June, citing "over-indebtedness," Wirecard filed for insolvency. By August, contracts with senior executives were terminated and workforce reductions amounted to 730 jobs. In September, the German parliament launched a comprehensive investigation into governmental failures that allowed the fraud to proceed.
Between 26 and 30 June 2020, the UK Financial Conduct Authority suspended operations of Wirecard's British subsidiary; services resumed thereafter under regulatory restrictions. Singapore’s Monetary Authority ordered Wirecard’s Singapore branch to halt payment services and return customer funds due to insolvency concerns.
A report published in June 2020 by Toronto's Citizen Lab exposed that critics of Wirecard—including hedge funds, short sellers, investigators, and journalists—were targeted by a hackers-for-hire group known as Dark Basin, linked to Indian firm BellTroX InfoTech. U.S. authorities reportedly initiated investigations into these hacking activities. Wirecard denied any involvement.
On 20 May 2021, senior legal counsel Pav Gill identified himself as the whistleblower who disclosed the fraud allegations to the Financial Times.
In June 2023, Singapore’s State Court sentenced James Wardhana, Wirecard’s international finance manager, to a prison term of 21 months and Chai Ai Lim, Head of Finance Asia, received a sentence of 10 months for their participation in the scandal.
Products and services
Wirecard operated globally as a provider of electronic payment solutions and risk management, specializing in mobile payment systems, e-commerce, digital transformation, and fintech innovation. Its portfolio encompassed the integration of diverse payment options for both online commerce and point-of-sale (POS) environments. By the end of 2018, Wirecard had a client base of 280,000 businesses, including prominent names such as Allianz, KLM, Qatar Airways, Rakuten.com, and Transport for London. The company handled transaction volumes totaling US$125 billion in 2018, which increased by 37.5% to EUR 77.3 billion during the first half of 2019.
Mobile payments
Starting in 2015, Wirecard introduced Boon, a fully digital mobile wallet app that operates independently from traditional banks or network carriers. Boon functions on a virtual Mastercard platform compatible with Android and iOS devices. The Android version is accessible in countries like Germany, Austria, Belgium, the Netherlands, Spain, and Ireland. Boon supports Apple Pay in France, the United Kingdom, Switzerland, Spain, Italy, Ireland, and Germany; additionally, Google Pay integration is available for Boon users in France. The application facilitates contactless payments via NFC technology on smartphones and tablets and enables online transactions as well as peer-to-peer money transfers.
Wirecard also secured agreements with telecommunications companies to enable NFC-based smartphone payments and provided a white-label mobile card reader solution for partners to accept card payments directly through mobile devices.
eCommerce
Within its acquiring services, Wirecard places a strong emphasis on the travel and transportation sectors. Since 2007, it has overseen payment processing and credit management for tour operator TUI and extended these services to KLM Royal Dutch Airlines in 2014. Its Supplier and Commission Payments (SCP) system is specifically designed for the travel industry by automating virtual credit card issuance to facilitate electronic payments to suppliers and partners worldwide through virtual card numbers.
Since 2014, Wirecard’s Checkout Portal has delivered a fully automated platform that integrates multiple payment options into online stores, catering primarily to small and medium-sized enterprises (SMEs) and digital marketplaces.
Digitalization of the retail sector
Wirecard played an active role in advancing the digital transformation of brick-and-mortar retail outlets, demonstrated through its partnership with T-Systems. In 2016, Wirecard collaborated with the WMF Group to create a mobile application that connects physical store purchases with online sales channels.
Alternative Chinese payment methods
From 2015 onward, Wirecard partnered with Alipay to offer Chinese tourists familiar payment solutions throughout Europe. This collaboration extended to retailers such as Printemps, The Body Shop, the National Bank of Greece, as well as merchants operating within Munich Airport.
Beginning in July 2017, Wirecard broadened its portfolio by joining forces with Tencent to incorporate WeChat Pay services, thereby strengthening its footprint in the Chinese digital payment landscape.
Card issuing
Wirecard worked alongside various organizations to facilitate card issuance services. Notable partnerships included fintech firms like Curve; emerging banking entities such as Atom; and financial applications including Revolut and Pockit. Additionally, it supported expense management platforms like Loot.
Financial information
| Year | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 |
|---|---|---|---|---|---|---|
| Revenue | 482 | 601 | 771 | 1,028 | 1,490 | 2,016 |
| Net income | 83 | 108 | 143 | 267 | 260 | 347 |
| Assets | 1,431 | 1,995 | 2,935 | 3,482 | 4,528 | 5,855 |
| Employees | 1,025 | 1,750 | 2,300 | 3,766 | 4,449 | 5,300 |
On June 22, 2020, Wirecard disclosed potential inaccuracies in its previously reported financial figures. Investigations indicated possible manipulation of the company’s balance sheets dating back to 2014.
Subsidiaries overview
By 2017, Wirecard had developed an extensive international presence spanning every continent.
Wirecard Card Solutions Ltd. (WDCS), based in Newcastle upon Tyne, UK, was a fully owned subsidiary holding an e-money license that authorized the issuance of virtual cards. It supported various mobile payment platforms, including Wirecard’s proprietary app, Boon.
Wirecard entered the American market in 2017 through acquiring Citi Prepaid Card Services, anticipating a $20 million increase in EBITA for that fiscal year. Expansion into Brazil occurred in 2016 with the acquisition of MOIP, while entry into India was achieved in 2015 by purchasing the payment operations of the Great Indian Retail Group. Since 2014, Wirecard concentrated efforts on growing its footprint across Asia-Pacific regions as well as the Middle East and Africa.
In August 2020, Visa-backed start-up Railsbank agreed to purchase Wirecard’s UK operations; this transaction was projected to finalize by November 2020 with no financial terms publicly revealed. Simultaneously, Wirecard’s Brazilian division was acquired by PagSeguro Digital based in New York City. In 2021, NomuPay procured payment licenses linked to Wirecard’s Asia-Pacific and Turkish units.
Selected Wirecard subsidiaries include:
| Subsidiary name | Location (City) | Country |
|---|---|---|
| Wirecard Bank AG | Aschheim | Germany |
| Wirecard Technologies GmbH | Aschheim | Germany |
| Wirecard Acceptance Technologies GmbH | Aschheim | Germany |
| Wirecard Retail Services GmbH | Aschheim | Germany |
| Wirecard Global Sales GmbH | Aschheim | Germany |
| Wirecard Communication Services GmbH | Leipzig | Germany |
| Wirecard Technologies Indonesia | Jakarta | Indonesia |
| Wirecard Card Solutions Ltd. | Newcastle upon Tyne | United Kingdom |
| Wirecard Central Eastern Europe GmbH | Graz | Austria |
| Wirecard S.A. | Bucharest | Romania |
| Wirecard Ödeme ve Elektronik Para Hizmetleri A.Ş. | Istanbul | Turkey |
| Wirecard Processing FZ LLC | Dubai | (United Arab Emirates) |
| Wirecard Singapore Pte Ltd. | Singapore | (Singapore) |
| Wirecard Payment Solutions Malaysia Sdn Bhd | Kuala Lumpur | (Malaysia) |
| Wirecard India Private Ltd. | Chennai | (India) |
| Wirecard NZ Limited | Auckland | (New Zealand) |
| Wirecard Hong Kong Limited | Hong Kong | (Hong Kong SAR) |
| Wirecard Africa Holdings Proprietary Ltd. | Cape Town | (South Africa) |
| Wirecard Brasil S.A. | São Paulo | (Brazil) |
| Wirecard North America Inc. | Conshohocken | United States |
| Wirecard UK and Ireland | Dublin | Ireland |
| Wirecard Australia A&I Pty Ltd. | Melbourne | Australia |
Bibliography
- Dan McCrum, Money Men: A Hot Startup, A Billion Dollar Fraud, A Fight for the Truth (Bantam Press, 2022)
See also
External links
- King of Stonks – A 2022 Netflix drama series depicting a fictional German financial services controversy
- Skandal: Bringing Down Wirecard – A 2022 Netflix documentary film
- Articles with short description
- Financial services companies established in 1999
- Financial services companies disestablished in 2020
- Multinational companies headquartered in Germany
- Financial services companies of Germany
- Online payments
- Payment service providers
- German companies established in 1999
- Insolvent companies
- Companies based in Bavaria
- Companies formerly listed on the Frankfurt Stock Exchange
- German companies disestablished in 2020
- Defunct SoftBank portfolio companies
- Defunct companies of Germany
- Corporate scandals
- Political scandals in Germany