What Does Brexit Mean for the Payments Industry?
For decades, London has enjoyed the undeniable position of European financial capital. Financial institutions—and, more recently, fintech startups—have used London as their base to access the European Union’s common market of 500+ million people. Whenever I was asked to advise companies on their European go-to-market strategies, we sooner or later came to the same conclusion: “We have to open an office in London.”
Things changed when the Brexit referendum results were announced. Though we all knew Brexit was a possibility, we weren’t prepared for the new reality that it now threatens to bring about. The impact on citizens of the United Kingdom has already been well-debated: volatile currency, higher interest rates, impacted real estate valuations. But what will be the impact of Brexit on the UK’s payments and fintech industries?
What is Brexit?
Brexit is the abbreviated nickname for a British exit from the European Union (“Britain” and “exit”). Having joined the European Economic Community (or EEC, a precursor to the EU) in 1973, Britain has always struggled to find balance between its national independence and the pan-European political ambitions of the EU. Though Britain voted to remain a part of the EEC in a 1975 referendum, perceived European influence on UK policy in the intervening years gave rise to increasingly pronounced Euroscepticism throughout the country.
Enter Nigel Farage and the United Kingdom Independence Party (UKIP), a right-wing populist party that harnessed anti-European sentiment to make rapid political gains in the years following the 2010 general election. Incumbent Prime Minister and Conservative Party leader David Cameron, recognizing that UKIP threatened to divide the right and hand the next election to the Labour Party, promised in 2013 to hold a referendum on EU membership if the Conservatives won the 2015 election. The Conservative Party did win in 2015, setting the stage for the in/out referendum held earlier this year.
Following hard-fought campaigns to win support on either side, British voters made their decision in June 2016: 51.89% leave, 48.11% remain. The United Kingdom had chosen to leave the European Union.
Because the terms of the UK’s exit from the EU have not yet been decided, the referendum has created a great deal of uncertainty in the markets. Will the UK retain access to the EU’s single market? How will the UK handle migrant workers from the EU? The referendum is non-binding; is there still a chance that the UK will remain in the EU? For now, we’ll just have to wait and see.
What Does Brexit Mean for Payments?
Since the referendum, Hyperwallet has been a leading contributor to the ongoing conversation around what Brexit means for the fintech industry, and for payments in particular. Below is a collection of Hyperwallet’s contributed articles and opinion pieces.
- PYMNTS.com — “Hyperwallet Talks Brexit’s Impact on FinTech”
- Paybefore Magazine — “Viewpoint: What Does Brexit Mean for Payments?”
- Let’s Talk Payments — “The FinTech Industry Speaks About Brexit and What It Means for Financial Services”
- The Paypers — “Brexit: What It Could Mean for the Payments Industry”
- The Digital Banking Club — “Brexit Financial Market Regulations Means Trouble for UK-based Banks”
- Cards International — “Brexit Financial Market Regulations Means Trouble for UK-based Banks”
We’ll continue to update this list as the discussion unfolds.