The scandal at Wirecard has not only exposed a multibillion-dollar fraud in the accounts and profound failures of oversight. It has also raised fresh questions of whether payments regulation in Europe has kept pace with the huge changes in the industry.
Digital payments innovation brings huge benefits to customers and businesses. The pandemic is accelerating our use of electronic payments and digital wallets. As a result, an even larger proportion of payments is likely to take place outside the tightly regulated perimeter of financial services. Wirecard’s bankruptcy underscores the urgency of next-generation payments regulation.