
Wirecard is 'beyond salvageable,' according to analyst - finphil
https://www.businessinsider.com/wirecard-is-beyond-salvagable-analyst-says-and-rivals-may-benefit-2020-6
======
SideburnsOfDoom
FYI, many prepaid cards in the UK are inoperable this weekend due to the
failure of Wirecard, which they depended upon:

[https://www.moneysavingexpert.com/news/2020/06/pockit--
curve...](https://www.moneysavingexpert.com/news/2020/06/pockit--curve-and-
other-prepaid-card-customers-see-accounts-froz/)

No clear answer of when these cards will be working again.

This will hurt disadvantaged people the most, who are more likely to depend on
a prepaid card, just have the one card, or to find £100 being temporarily out
of reach as more than an inconvenience.

~~~
bserge
Interesting, I have a Pockit account and haven't heard anything from them.
Maybe because it's the weekend, but they usually send notification emails when
their services go down sometimes for maintenance (card withdrawals were
usually unaffected though)..

~~~
SideburnsOfDoom
There are notification emails to affected customers this weekend, or at least,
I have received 2 so far, so I assume that all affected customers got them.
I'm not sure if all Pockit accounts are with Wirecard.

You can see more at the links that they give:
[https://twitter.com/PockitUK](https://twitter.com/PockitUK)
[https://blog.pockit.com/important-update-pockit-accounts-
tem...](https://blog.pockit.com/important-update-pockit-accounts-temporarily-
inaccessible-4b038228cc93)

I am thankfully, not substantially unconvinced by this account being frozen.
But I am sure that it's not good for many Pockit customers or for Pockit's
business.

~~~
bserge
My card says Wirecard, and the last email from Pockit was on the 20th ("Summer
of cashback"). Strange.

But I'm not using it much, it's just a card for safe online purchases. Saved
me twice, it's a good thing to have.

~~~
SideburnsOfDoom
Right, I also see the words "issued by Wirecard Card Solutions Ltd" in the
small print on the back of the card.

Getting the email might also be related to recent activity, e.g. when you last
used the card?

Be aware that while it's good to have a backup card, this one is not going to
save you today.

------
lifeisstillgood
Slate Money podcast was surprisingly good on Wirecard this week. Three things
popped out - that this had been widely claimed as a fraud (millions in
business going through offices that were just postal drops etc) but the German
"establishment" supported them because they had no native german payment
processor otherwise (and once you were in the Dax 30 it's a big deal to
declare fraud).

Also the failings of shorting a business - it's not enough to know they will
collapse sometime, but you cannot keep covering your short for _five years_
without wondering if the bet is worth it.

But really this is just yet another example of regulatory failure and it's
hard to see how we fix it without destroying the culture of entrepreneurship

~~~
hef19898
Agree, with the exception of the last paragraph. SOX didn't kill NASDAQ or the
Dow. And if an entrepreneur is only successful because regulations are lax,
not enforced and his business is ignoring corporate governance, that business
doesn't seem to have any justification to exist in the first place.

~~~
lifeisstillgood
Wow. I have really bought into a line sold to me subconsciously haven't I.

Yeah. Let's have proper regulation and policing.

------
rafaelturk
The most important asset of any financial institution is trust. Banks,
fintechs need utmost trust from customers in order to run their business their
business. Imagine Wirecard customers debating if they will continue to use
Wirecard as payments as processor considering that they can't manage neither
account for their own money.

~~~
rini17
There were numerous reports of PayPal withholding funds for unknown reasons
and ruining people and businesses. Did these dent the trust? Seems not at all.

~~~
close04
I'm not sure if this is a matter of trust or lack of choice in this case.
There simply aren't too many options to achieve the same results as with
PayPal. Every site I go to gives me several payment options but the only ones
present across every one are PayPal and card payment. So if that's what the
buyer uses, the seller doesn't get much of a choice either.

~~~
A4ET8a8uTh0
This. Based on the offerings I saw, Paypal is noticably cheaper than other
options for basic small business use case ( minor ebay shop, small online
store ). The charges are straighforward and easy to predict. Compare that to
most other providers and you find yourself digging through reams for legalese
with fees calculations that are ridiculously complex and, seemingly, designed
to deceive.

I am not a big fan of Paypal and heavens know it has some major issues to
address, but the entire field kinda sucks in its own unique way.

~~~
cptaj
I think the biggest issue with the entire field is not respecting the users.
They're treated as potential criminals, their livelihoods and money are not
respected at all, they have no recourse to protest administrative action, etc.

Its a terrible experience overall. It has gotten better but still leaves a lot
to be desired

~~~
PeterisP
Just like there's no way around the fact that a large portion of email is
spam, there's no way around the fact that in the field of receiving money on
internet, a substantial niche of potential users actually _are_ criminals.
Their volume of transactions is quite large, they are sophisticated and eager
to try out new services, and they can rapidly direct the flow of (many)
fraudulent payments to a new payment service provider or scale the
exploitation of some cash-out system to thousands of accounts managed dozens
of actual people (generally 'money mules' who get scammed themselves).

So if your service is friendly to that group of customers, no matter if
accidentally through some process flaw or intentionally (because you're not
treating criminals creating accounts as potential criminals), then you can
(and will) suddenly get a _lot_ of criminal activity. For a small service, as
soon as organized criminals notice that your policies allow them to use you
for making fraudulent transactions, they can quickly bring in much more
transactions that any of your marketing activities.

The general result of doing what you propose is that it works until criminals
notice a particular vulnerability in your processes/policies caused by
excessive trust in users, and then suddenly you get a _LOT_ of fraudulent
activity which makes all your operations unviable. I've seen small merchants
get a tenfold increase in transactions over a single week, with all of that
increase being fraud, enabled by some weakness that is massively exploited
until they close the weakness. Or close their business - for a small business,
a single major fraud campaign can easily be enough to bankrupt them.

------
the_mitsuhiko
I keep hearing this “not salvageable” but this seems odd to me. Wirecard has
been issuing physical cards for many companies and runs the payment systems
for many large companies. The cost of switching off that infrastructure is
high.

Why wouldn’t someone want to acquire a miniature wirecard after the bankruptcy
is through?

~~~
WJW
The cost of switching off that infrastructure may be high, but it's not borne
by the creditors.

In any case, the article states that Visa and Mastercard will likely revoke
the Wirecard license on their respective platforms and most if not all
customers will seek an alternative payment provider long before the bankruptcy
is through. Presumably most of the employees will have sought greener pastures
by then as well. What is left is a company shell with (maybe) some source code
but no customers, no license, no employees and the name of Wirecard haunting
it. Possibly also some leftover liabilities. Might as well start a brand new
company at that point, if you want to enter the payment processing industry.

------
gip
I worked for a fintech company until 2018 and learned a lot about the payment
ecosystem. At an industry event in 2017 (or maybe early 2018) I discussed with
an industry veteran about a bunch of things and he mentioned wirecard, saying
that nobody believed they had a profitable business and advised to stay away
from them. I didn’t pay too much attention.. until last week!

------
dang
The Wirecard stack so far:

[https://news.ycombinator.com/item?id=23662704](https://news.ycombinator.com/item?id=23662704)

[https://news.ycombinator.com/item?id=23638624](https://news.ycombinator.com/item?id=23638624)

[https://news.ycombinator.com/item?id=23611347](https://news.ycombinator.com/item?id=23611347)

[https://news.ycombinator.com/item?id=23573386](https://news.ycombinator.com/item?id=23573386)

[https://news.ycombinator.com/item?id=23598824](https://news.ycombinator.com/item?id=23598824)

[https://news.ycombinator.com/item?id=23438323](https://news.ycombinator.com/item?id=23438323)

This, from a year ago, reads interestingly now:
[https://news.ycombinator.com/item?id=19737344](https://news.ycombinator.com/item?id=19737344)

------
rwmj
Short video from the FT reporter who was investigated by German authorities
and followed by people working for Wirecard:
[https://www.youtube.com/watch?v=u-8-QbDpqqw](https://www.youtube.com/watch?v=u-8-QbDpqqw)

------
f6v
Payoneer customers have been hit hard by this. And judging by the past,
there's a slim chance of recovering their funds.

------
empath75
Somehow bitfinex keeps chugging along, though.

~~~
quickthrowman
It’s almost as if cryptocurrencies have no intrinsic value, only
extrinsic/speculative value.

Due diligence doesn’t matter to the people that expect a 10x or 50x gain.

