Fintechs should learn the lessons of Wirecard and Lanistar

Peter Cox, founder of payments provider Contis, says payments companies need to get a grip of regulation.

Lanister cofounder and CEO
Peter Cox

By Peter Cox

Can we really trust in the fintech revolution? The last few months suggests perhaps not. First Wirecard becomes Europe’s largest fintech collapse, and now the FCA is challenging Lanistar on product launches, even mentioning scams!?

It’s plain to see the current fragility in the fintech industry. The fact is, there’s no room to forget that when dealing with payments, the regulator should be at the core of your activities.

As the Wirecard story has unwound, it’s become obvious not only that the regulators dropped the ball, but the industry and investors lapped up the hype and promotion.

Wider European fintech needs to understand that payments is a difficult regulated sector, and since Wirecard, is becoming a more demanding compliance-based sector.

As a true veteran of the space, I am shocked to see young providers making outrageous claims, based on little fact or proven ability to deliver, and designed only to woo investment and new clients.

Over recent days we’ve seen Lanistar fall foul of the FCA and as a result, having to climb back into its shell, with huge potential damage to its brand credibility. All because of statements made that the FCA considered premature and potentially risky for the public. [Editors Note: this FCA warning was later withdrawn after Lanistar promised to make changes to its marketing.]

How could this happen, when so much money has been poured into these fintechs? 

The answer, I believe, is simple. Bright people with great commercial ideas are not necessarily equipped to understand the constraints and regulation that surround payments, let alone the risks of onboarding millions of customers. 

In the case of Lanistar, it’s highly likely the founder was convinced he had contracted suitable suppliers and partners that would give him various regulatory rights to take a product to market. All while screaming with confidence about his leading-edge technology which would quickly make his venture a unicorn. 

So how did this situation arise in the first place? (Which, I assume, must be the big question on his mind).

Perhaps by relying on many independent and unconnected suppliers to provide the different components of payments, the strict regulatory control required to operate in the payments space was just lacking.

To launch a payments programme which encompasses banking capabilities, using sort codes and account numbers all linked to payment cards issued by Visa or MasterCard, requires a single, focused, firm control of all the moving parts. And most importantly, it requires the ability to ensure that the business listens to regulatory compliance advice.

When a fintech chooses multiple regulated suppliers, it risks immediately creating fragmentation over the most important reason for business failure, regulation!

If one creates a number of spinning plates, each supplier often assumes that someone is looking after the regulatory status of the whole. 

But the client assumes that the regulated providers, being experts in this space, are managing all relevant risks. 

As recent events show, in reality each party was only focused on their own contracted involvement, and we can assume no regulated entity had control over what the brand was presenting to the market.

This type of fragmentation and lack of accountability will kill unstructured fintechs as increased supervisory control from the FCA (rightly) impacts the sector.

The conclusion for investors and entrepreneurs should be to take a step back and think deeply before entering the world of payments. They must understand that the regulator has the means at hand to destroy a promising venture, if you get it wrong. My advice is to use either a single regulated provider or to employ a head of risk and compliance from day one who is strong enough to protect you from your own ambitious statements.

Peter Cox is the Executive Chairman and Founder of Contis, a leading payments business in the UK and Europe.

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A call for more sensible regulation and a bit more guidance from suppliers for start-ups like Lanistar (so they know what they are/aren’t allowed to do from the start) seems like a good idea – or am I missing something?

Doesn't matter
Doesn't matter

Pretty poor journalism to lump Wirecard and Lanistar in the same sentence. Whilst Lanistar could have done things much better and I’m skeptical of the success the company will have, their issue is in no way comparable to Wirecard. This kind of journalism is sensationalist at best, extremely poor at worst.

Chris Skinner
Chris Skinner

Urrmmmm … didn’t the FCA withdraw these claims about Lanistar three days before this piece appeared here … Sifted’s editor should have better standards and be better informed


I have never seen any single sound card program of yours.

I have seen many of your card use in non-EU countries which is not fit into regulations too.

Blaming new or old big companies to gain market attractiveness won’t work for contis.

All fintechs knows contis uselessness.

There are many unpleasant stories there

Wirecard helped many unicorns from baby boomers stages. Including Revolut, etc.

I respect and proud more Wirecard then Contis.

What will Monese comment on Monese? Monese and Wirex suffered a lot with contis.

John H
John H

Old mans wishes, for the world to stay the same

your boss
your boss

Another hit-piece on Lanistar – bundling them together with Wirecard. One wonders!!


He should ask his grandkids about Insta


Great piece – it would be interesting to know at what stage fintechs typically bring on a compliance/risk lead – is it normally from day dot?

PJ Johnson
PJ Johnson

Sour grapes

S Hughes
S Hughes

Very funny and very true! It’s so blatantly obvious that when the young, up and coming try to disrupt the status quo, the old school simply can’t help but try and have a dig. Peter Cox is the epitome of old school whereby it’s easier to throw aspersions as it is to help guide and encourage. It’s easy to throw criticism on those seeking to innovate in an industry that tries to portray such a willingness to accept change when the reality is it would rather not change at all. I wish Lanistar all the luck in a world of… Read more »