Bulgaria’s Paynetics swoops in to buy part of Wirecard UK and Ireland
Paynetics, a Bulgarian end-to-end payment service provider, has acquired the corporate pay-out card portfolio of Wirecard UK and Ireland.
Paynetics will “work with corporate customers, who have previously relied on Wirecard for card issuing and payment services, to adopt Paynetics for the continuation of their existing card programmes”.
The alternative for these corporate clients, until now, was the termination of their card programmes. And this isn’t the first acquisition in recent memory for the card portfolio customers.
Three years ago, Wirecard bought these customers from Citi for an undisclosed sum.
Former chief operating officer of Omnio, Mike Peplow, will lead Paynetics as its new UK CEO.
Paynetics, the “white knight”
Paynetics is a regulated e-money institution. It’s licensed across the European Union and is a principal member of Mastercard, Visa, Swift, and SEPA.
The deal follows the disintegration of German fintech Wirecard. The disgraced firm is still seeing parts of its subsidiary assets sold off following its fall into insolvency.
“When faced with the difficult decision of sun-setting Wirecard’s corporate payout card business, Paynetics showed up as the white knight,” says Laura McCracken, Wirecard UK and Ireland’s chairman.
“Their speed and agility enabled us to preserve numerous programmes for our corporate clients and ensure minimal disruption to thousands of end-users.”
Paynetics’ co-founder, Valeri Valtchev, ehoes McCracken’s sentiment. He calls the deal “a game changer” for customers who can now rest easy “in a safe pair of hands”.
For Paynetics, Valtchev calls the deal “a crucial milestone”. Particularly in terms of the paytech’s expansion in the UK and European markets.
Wirecard flash sale so far
Since its collapse, Wirecard AG has seen its subsidiaries either bought off, liquidated, or put through administration pending a sale.
Change Financial, a US fintech listed on the Australian Stock Exchange (ASX), is in the midst of raising capital to acquire Wirecard’s Australia and New Zealand business.
The payments and card issuing firm has signed a binding agreement to acquire all the assets of the business for AUD 7.8 million ($5.7 million).
Wirecard’s UK subsidiary – Wirecard Card Solutions (WCS) – sold to PayrNet, a subsidiary of London-based Banking-as-a-Service (BaaS) provider Railsbank.
PagSeguro Internet – a wholly-owned and fully-controlled subsidiary of PagSeguro Digital – signed a binding agreement to acquire 100% of Wirecard Brazil SA.
Neither PayrNet nor PagSeguro have revealed how much the sales cost them. But with Wirecard’s Australia and New Zealand business standing at a price tag of just $5.7 million, it’s likely these deals were similarly cheap.
In August, Wirecard AG terminated 730 of its employees, along with remaining board members.
These terminations, which account for more than half of its staff, affect its core business and its subsidiaries. About 570 employees, including 350 at Wirecard’s insolvent subsidiaries, remain in employment.