Britain is moving closer and closer to the reality of operating in a post-Brexit world as the “Brexit bill” proceeds for Royal Assent. In this week’s Brexit Tracker, Scotland makes a strong statement on independence, the catalyst for changing global B2B payments and the bill to trigger Article 50 could become law any day now.
Scotland Demands Independence
On Monday (March 13), Scotland’s First Minister Nicola Sturgeon stated that the country will seek an independence vote in late 2018 or early 2019.
The plan is for the referendum to take place after the fate of Britain’s exit from the European Union (EU) is clearer, Reuters reported. The details and timing of the referendum will be decided by Scotland’s parliament.
“If Scotland is to have a real choice — when the terms of Brexit are known but before it is too late to choose our own course — then that choice must be offered between the autumn of next year, 2018, and the spring of 2019,” Sturgeon told reporters.
Back in 2014, a vote for Scotland’s independence was rejected by 55-45 percent in a referendum but Reuters noted that support for the Scottish National Party has since increased.
The independence vote has the potential to bring major impacts to the U.K. economy as British Prime Minister Theresa May prepared to kick off formal Brexit talks, which could take as long as two years.
Shortly after Sturgeon’s announcement, Sinn Fein, Northern Ireland’s largest Irish nationalist party, said it also wanted a referendum to split from the U.K. “as soon as possible.”
“Brexit will be a disaster for the economy and a disaster for the people of Ireland,” Michelle O’Neill, Sinn Fein’s leader in Northern Ireland, explained. “A referendum on Irish unity has to happen as soon as possible.”
The Profound Impact On Corporate Payments
Saxo Payments CEO and founder Anders la Cour recently spoke at the European Payment Summit and insisted that Brexit will present major changes for corporates’ FX and global practices, as well as an overhaul in the company-bank relationship.
“Clearly the U.K.’s exit from the EU is taking considerable thinking time for businesses right across the Union,” la Cour said. “And one area that needs to be addressed is stability in the processes that businesses use for cross-border payments. Whatever else might happen, they want to have certainty about cash flow and costs.”
The executive said the research reflects businesses’ desire to have a streamlined banking experience.
“Indeed, our piece of focused research amongst payment professionals suggested that there is an appetite for businesses to find a third-party, one-stop shop to provide the platform for their cross-border payments, with nearly 60 percent advocating this approach, driven by a desire to reduce external costs and improve cash flow,” he stated.
A recent survey from Saxo revealed that one-third of businesses said they plan to move operations out of the U.K., and half said they plan to switch financial partners following Brexit. And while more than a third of companies said they would prefer to have a single banking relationship, about a third said they have five or more of these partnerships.
La Cour’s remarks and Saxo’s latest survey results follow a separate report released by the company that found financial institutions are missing major opportunities by missing cross-border and FX payment needs among their corporate clients.
Forty percent of businesses said their current financial service provider cannot help in their international expansion, while nearly half said their current provider does not offer FX tools like analytics and risk mitigation. Further, 44 percent of companies cited payment settlement times as their largest challenge with regards to cross-border payments.
‘Brexit Bill’ Moves Forward
Just this week, U.K. parliament officially passed the Brexit bill, enabling the government to eventually trigger Article 50 so that Brexit talks can get under way.
The bill is expected to receive Royal Assent and become law within the next week. Once this takes place, Theresa May can begin withdrawal talks with the EU. From the moment that Article 50 is invoked and the U.K. gives the EU official notice of its intention to leave, it’s predicted that the Brexit process will take two years to complete.
“We are now on the threshold of the most important negotiation for our country in a generation,” Brexit Secretary David Davis explained.
The EU Withdrawal Bill was passed after a vote of 274-118, the BBC reported.