Freelancers' Millions of Dollars Stuck Due to Wirecard AG's Bankruptcy

2020 has kept explosive surprises coming. And the business world hasn’t fallen short of these shockers. From being one of the most valuable fintech empires in the world, the German payment processing firm called Wirecard has crumbled just like that.

 After its CEO Markus Braun bowed out of the company and ultimately arrested due to alleged fraudulent accounting activities, Wirecard AG finally filed for bankruptcy on Thursday, June 25,, 2020.

But what does this insolvent status mean to subsidiary companies, its partners, and freelancers across the globe who relied on the supposed reputable financial firm for their online payments and other digital financial transactions? 

With the fallen fintech giant’s current financial chaos, nobody knows exactly whether global remote workers especially those wirecard-issued card holders can withdraw their money anytime soon, as millions of funds are temporarily frozen as a result of the shocking financial scam. 

Wirecard has an estimated debt of about 4 billion USD, and around 1.9 billion Euros that’s nowhere to be found in the company’s books, of which Wirecard later on admitted being non-existent to begin with. In their press release, the Germany-based company said that they are currently assessing whether to also file insolvency for its subsidiaries. Naturally, it caused panic amongst users of online money transfer cards issued by Wirecard Card Solutions Limited (WCSL) UK, such as  Payoneer Prepaid Mastercard and boon card.

However, all hope is not lost for freelancers with money still stuck due to Wirecard AG’s bankruptcy. Payoneer said that the UK FCA or Financial Conduct Authority has already intervened and is now overseeing WCSL in order to protect the interest of all Wirecard clients. But this in turn results in the temporary suspension on all card activities. 

For the time being, the funds on your card might stay frozen for as long as the FCA investigation is happening. The good news is Payoneer assures customers that they are working closely with the FCA to be able to resume all card activities as soon as possible. Payoneer also highlighted that clients can withdraw the money that is exceeding the maximum balance of their card as it’s being held by Payoneer and therefore not affected by the temporary freeze. 

But what about your pending payments, you may ask. Pending transfers on the other hand will go straight to your Payoneer account as a virtual currency balance just like how PayPal works. This means that you simply sign in, add a local bank account if you haven’t yet, and then you can transfer such funds to your bank for future withdrawal.

Just like the pandemic, nobody has seen the collapse of Wirecard coming. And just like any other massive scandals that we get to see time and again, the story of the disgraced fintech firm must serve as another important lesson for private customers and businesses alike. Giants like Goliath are not invincible. 

As virtual freelancers, being able to receive payments successfully and on-time is critical. Therefore, payment methods matter. The only way to make transfer and receipt of payments secure is to be more critical in terms of choosing the type of online payment service to use.