International

Brexit A Thorn In FinTech’s Side?

UK technology hub

Will it really happen? Thus far polls show that in the U.K., with an eye on the European Union, the answer to the question “should I stay or should I go” is … go. 

A June 23 vote is scheduled and being watched with bated breath to see if the U.K. does indeed go its own way.

For FinTech, where the U.K. has been at the forefront of technology and innovation, with the wholesale backing of the government, the problems would start almost immediately, once an exit is actually engineered. The industry would be essentially confined to its home shores, with an interruption of flow between the island and the continent. The membership within the EU is essentially a level field wherein FinTechs can morph from startups to full-fledged businesses with a market ready to embrace new wrinkles on old themes (that would be payments, and in particular, faster payments). The confines of FinTech in this scenario (that is to say U.K. FinTech) would limit small firms to the payments systems that are used within the U.K., in essence creating a “reverse moat” that keeps firms from successfully interacting with other nations – after all, wouldn’t it make sense that trade would be at least somewhat truncated?

The concern is palpable. 

Earlier this month, Financial News conducted a survey that delved into more than 100 FinTech professionals – and more than two-thirds of them said that the move to exit the EU would be detrimental to the industry at large. The key stumbling blocks would be that talent, normally outsourced from the continent (think tech talent like coders, data scientists and salespeople in certain territories) would be a spigot all but sputtering. The competition with the firms that are already looking to make inroads into Europe, chiefly other European but also U.S. firms, would find the playing field tilted a bit more toward their favor.

Over the nearer term, and at least partly connected to the Brexit and FinTech conundrum is what would happen to the equity markets globally should the EU get a thumbs down from the U.K. The U.K. stock markets would no doubt be slammed, but other bourses would be hit hard – and volatility even in its short-lived form would keep tech firms from coming public – even more than they already have been (as has been widely noted; the U.S. has seen only a duo come public).  

Come June 23, hail Britannia, Britannia will make the waves.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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