Nilson Report

Issue 1178 | Jun 2020

FEATURED COMPANIES

Companies featured in this issue include:

Global Network Cards in 2019—Purchase Transactions

Global Network Cards 2019—Purchase Volume by Product

Global Debit and Prepaid Cards 2019

Global Credit Cards 2019

Global Network Cards in Circulation—with Market Shares

Global Network Cards 2019 vs. 2018

Market Share of Purchase Transactions on Global Network Cards

Largest Merchant Acquirers in Middle East and Africa—Ranked by General Purpose Transactions

Merchant Acquirers in Middle East and Africa—Ranked by Visa and Mastercard Transactions

Largest Merchant Acquirers in Middle East and Africa—Ranked by General Purpose Transactions

The five largest merchant acquirers in the Middle East and Africa region are based in Iran. All transactions handled by these companies are domestic-only Shaparak network card payments.

1. Behpardakht Mellat
5.68 billion purchase transactions
2. Saman e-Pay
4.82 billion purchase transactions
3. Parsian e-Commerce
3.80 billion purchase transactions
4. Asan Pardakht Persian
3.69 billion purchase transactions
5. Iran Kish Credit Card
2.37 billion purchase transactions

Full access to the Largest Merchant Acquirers—Ranked by General Purpose Transactions results in Middle East and Africa in 2019 is available when you subscribe to the Nilson Report.

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POSTED JUN 30, 2020 | PRINT

Wirecard’s Prepaid and Merchant Acquiring Assets

Please note: Only subscribers can access the charts included with this article.

Germany-based Wirecard AG, provider of prepaid card issuing and account processing services as well as merchant acquiring and POS terminal processing services in more than 20 countries, filed for insolvency in Munich on June 25, 2020. The filing was made by the holding company and did not cover its subsidiaries. Wirecard had loans due on June 30 for $896 million and on July 1 for $560 million.

Wirecard is a principal member of Visa and Mastercard in Europe through Wirecard Bank in Germany as well as e-money licensed institutions in the U.K. and Turkey. The bank in Germany holds an estimated $1.55 billion in deposits. It is under management of German banking regulator BaFin.

The company’s founder, Marcus Braun, spent nearly two decades building a publicly traded company (Frankfurt Stock Exchange), mainly through acquisitions. Those purchased assets, prepaid and acquiring, were legitimate. However, none ever gave Wirecard significant market share in any country. 

There were bogus assets too and wild claims as to their profitability. Those businesses ostensibly focused on merchant acquiring/processing in Asia-Pacific. Profits from those entities on Wirecard’s balance sheet were either part of a fraudulent conspiracy by company higher-ups or the product of the fraudulent deception of those same higher-ups by conspirators with which the company thought it was doing legitimate business. Wirecard claimed to have $2.10 billion in cash on its balance sheet that almost certainly never existed. That cash amounted to over 32% of the $6.50 billion in total assets claimed by the company. Mr. Braun was arrested in Germany and charged with fraud on June 23.

EY, Wirecard’s auditing firm, claims it was deceived. Investors in Wirecard are suing EY. Among other things, plaintiffs say EY never validated cash claimed to be in an account at OCBC Bank in Singapore in 2016, 2017, and 2018. SoftBank converted the convertible bond to a hedge transaction in September 2019, which limited its exposure in Wirecard. 

In the Philippines, regulators are investigating Centurion Online Payment, PayEasy Solutions, ConePay, and two other companies that supposedly were significant Wirecard merchant acquiring/processing partners. The companies exist only on paper. When EY conducted its audits, it was shown documentation that Philippine banks BDO Unibank and Bank of the Philippine Islands held up to $2.10 billion (€1.9 billion) in cash. The documents were likely forged by bank employees.

Wirecard’s legitimate assets include issuing its own boon brand mobile wallet prepaid cards on the Mastercard network in France, Germany, Ireland, Italy, Spain, Switzerland, and the U.K. 

Merchant acquiring assets in Europe include contracts to process online payments, mostly for airlines. Other processing contracts include those with Kyivstar (Ukraine), Getty Images, and Olympus. Wirecard is a certified Visa Token Service vendor. It operates POS terminals in Germany, Austria, the Czech Republic, and Romania as a third-party processor. 

In Asia-Pacific, Wirecard bought merchant and cardholder account processing assets from New Zealand-based CFG in 2014. Two years later, it bought Visa Processing Service businesses in Singapore and India and gained 70 contracts to be a third-party debit card account processor. It has a merchant acquiring joint venture with Cuscal in Australia. In India, Wirecard manages a network of 5,000 retail outlets that process consumer bill payments and its GI Technology subsidiary works with DCB Bank to acquire merchant transactions. In 2017, Wirecard bought merchant card processing contracts from Citi covering 11 countries. Last year, Wirecard bought the assets of AllScore Payment Services in China. Ctrip, China’s largest online travel agent, uses Wirecard to issue a prepaid Visa card. Wirecard also issues a Visa prepaid card in partnership with cryptocurrency payment platform Wirex. Shell is a fleet card customer in Indonesia.

In the U.S., Wirecard bought Citibank’s prepaid card business in 2017. Currently, Wirecard North America processed cards are issued in the U.S. and Canada by Peoples Trust, Fifth Third Bank, and Sunrise Banks. The business is for sale. 

In Mexico, Wirecard has a partnership with Banca Afirme to issue commercial prepaid cards.

Prior issues: 1174, 1173, 1172, 1170, 1165, 1163, 1162, 1159, 1153, 1146, 1144, 1140, 1138, 1136



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