Wirecard's Collapse Touches Adult Sector
Monday, June 29, 2020
A major financial sector crisis surrounding the implosion of German
e-commerce bank Wirecard has affected some adult industry merchants,
mainly in Europe, according to sources in the payment processing sector.
Wirecard, as Forbes reported
today, “collapsed yesterday with debts of almost $4 billion, after the
company admitted that around $2 billion of cash on its books didn’t
The solidity of Wirecard, started in 1999 and with a long history in
processing payments for adult businesses, had been questioned by
investors surrounding a series of reports by the Financial Times
regarding their business practices and accounting.
Wirecard describes itself as “a fully integrated, digital financial commerce platform.” It is part of the fintech sector.
This week Wirecard’s CEO and CTO Markus Braun resigned and was arrested over the missing $2 billion.
Wirecard and Adult Sector Merchants
In the adult sector, a source explained to XBIZ, merchants typically
received two kinds of services from Wirecard: the e-bank would set up
payment processing and perform Visa/Mastercard transactions; or help set
up a European bank account for funds settlement.
Several merchants, mostly in Europe, had bank accounts through Wirecard.
These two areas, the source added, are where merchants are getting impacted by Wirecard’s collapse.
Both merchants and payment processors are keeping an eye on the
development of the Wirecard collapse, particularly on the German
authorities and courts' decisions regarding the next steps in deciding
the status of the bank.