Card acquirer PagSeguro closes an agreement to buy Wirecard's operations in Brazil

Wirecard, the German payments processor that collapsed earlier this year, has over 200,000 customers in Brazil

Photo: REUTERS/Andreas Gebert/File Photo
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  • The value of the deal has not been disclosed;
  • If completed, the deal would be the the first asset of Wirecard’s global operations to sell after the company collapsed amid an accounting scandal.

Brazilian card acquirer PagSeguro announced on Friday the purchase of Wirecard‘s operations in Brazil. The German payments group collapsed this year after an accounting fraud scandal.

The value of the deal has not been disclosed. PagSeguro, controlled by the internet group UOL, said in a statement to the market that Wirecard Brazil has over 200,000 customers and that the transaction is complementary to its main businesses.

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The company also said that the operation will allow the offer of digital accounts 100% omnichannel. According to the company, Wirecard Brasil products are integrated in more than 40 online store systems.

The deal comes with the boom in e-commerce caused by social isolation measures and may reinforce PagSeguro’s operations.

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In the first quarter, PagSeguro reported a profit of BRL 357 million, a 15% growth year over year. In the period, the company increased its customer base by 25%, to 5.5 million.

PagSeguro’s deal with Wirecard was also announced after rival Stone made a deal to buy Linx, an offer that received a counter-proposal from TOTVS.

If completed, the deal would be the the first asset of Wirecard’s global operations to sell after the company collapsed amid an accounting scandal earlier this year.

An agreement in principle has also been reached to sell some operations in Britain to Railsbank Technology, and the process of selling its North American operations are well advanced with a deal expected “shortly”, the administrator said.

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Wirecard was a rising star in corporate Germany, earning a spot as one of 30 blue chips, but in a dramatic fall from grace, Wirecard filed for insolvency owing creditors 4 billion euros ($4.71 billion) after disclosing a 1.9 billion euro hole in its accounts.

Prosecutors suspect Wirecard executives of masterminding a criminal racket to fake the company’s accounts. “The framework conditions of the Wirecard insolvency proceedings have been, and still are, very difficult,” said the administrator, Michael Jaffe.

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