The Pennsylvania-based firm, which calls itself a self-sustaining entity, “substantially autonomous” from Wirecard AG with more than 20 years in the payments industry, has hired an investment bank to manage the sale. The bank involved in the transaction was not named.
“Wirecard North America continues to operate without any disruption to clients and cardholders,” said Seth Brennan, Wirecard North America’s managing director, in a statement. “The strong, independent cash flow and financial position of Wirecard North America allow us to operate the business on a completely standalone basis. Our valued customers and partners remain our top priority, while the dedicated North America team continues to ensure that there is no interruption in our day-to-day processes.”
Wirecard North America was formerly the Citi Prepaid Card Services business, which Wirecard AG acquired in 2017. Since the acquisition, Wirecard North America has remained a separate legal entity.
Wirecard AG will continue to have no impact on decision-making and financials at Wirecard North America, the company said Monday.
Wirecard North America said its cardholders and client funds are safe and protected at well-capitalized, independent U.S. and Canadian partner banks including Sunrise Banks, Fifth Third Bank and Peoples Trust Co. The three financial institutions have verifiable documentation of accounts and all contractual obligations will continue to be honored, the company said.
In addition, Wirecard North America said relationships with issuing banks and vendors will also continue without disruption. Additionally, Wirecard North America leverages Mastercard and Visa licenses on behalf of its bank partners and does not hold these directly.
Wirecard AG filed for insolvency last week in Munich following an auditor’s disclosure that $2.1 billion of supposed deposits were missing from two banks in the Philippines. It is facing investigations by law enforcement in Munich, Singapore, the United Kingdom and the European Union.
On Thursday (June 25) the embattled company filed for insolvency seeking the court’s protection, making it the first member of the country’s Frankfurt Stock Exchange to do so. Two weeks ago, Wirecard founder and CEO Markus Braun, 50, resigned. Last week, he was arrested on charges of misrepresenting Wirecard’s accounts and market manipulation. He has since been released on 5 million euros ($5.6 million) bail.