Businesses must rethink payments post-Wirecard, BlueSnap says

By Sunniva Kolostyak

The collapse of Wirecard has revealed a need for businesses to implement protective failovers for payments, as accepting money can no longer be taken for granted, according to BlueSnap’s MD, Europe.

According to Nikhita Hyett, MD, Europe at payments platform BlueSnap, businesses must rethink their strategies when it comes to accepting payments following the scandal.

Hyett told IBS Intelligence that whilst the Wirecard outage may seem to have been the result of a unique set of circumstances, it represents the ongoing risks that businesses and consumers are, often unknowingly, subject to by being reliant on one bank for all of their payment processing.

“Even in 2020, accepting payments is something we can no longer take for granted,” Hyett said. “A major learning from the scandal is the requirement to have a failover. Businesses exclusively using only one acquiring bank need to rethink their strategy, branch out and adopt a failover.”

The answer for businesses lies in multi-acquiring, she explained. “By connecting to multiple banks, payments can be redirected with the flip of an API-enabled switch.”

Multiple banks equal multiple failovers, which essentially means multiple payments options and constant protection and access to money.

“Nowadays, by working with the right payment processing platform, payments can be redirected from one bank to another with minimal effort. Multi acquiring is no longer the arduous, manual task reserved exclusively for large businesses.”

The BlueSnap MD added that in addition, there is a hard lesson to learn from Wirecard in terms of industry governance, which affects traditional financial institutions as well as newer FinTechs.

“We expect regulators all over the world to double down on the existing requirements. There is no room for error and, as we learnt from the Wirecard situation, regulators cannot afford to let standard requirements slide – regardless of how much they want to promote a local FinTech.”