Mind The Brexit Gap In Clarity, Please

It’s hard to find many headline this week that doesn’t have something to do with Brexit and how the U.K.’s decision to say “see ya” to the E.U. is impacting everything from eCommerce sales to the value of the nation’s biggest financial institutions.

But with London itself being one of the world’s biggest FinTech centers, the real question that’s yet to be answered is how the Brexit fallout will impact the various merchants, startups and VCs that call the city home.

Though there’s been rumors of a mass migration of the country’s top tech talent and some businesses eagerly looking elsewhere to relocate, Ralph Dangelmaier, CEO of BlueSnap, joined Karen Webster to provide his firsthand account of what’s really happening across the pond.

“I’ve got one word for you which I think is understated: confusion,” Dangelmaier told Webster at the top.

“There’s a lot of confusion, a lot of shock.”

Dangelmaier, who is in London (aka Brexit’s Ground Zero) this week for a mobile commerce conference, said he’s been able to speak with merchants, FinTech players, banks, acquirers and even the networks, with everyone expressing the same feelings of uncertainty.

But what he’s found to be the most interesting in talking to who's on the ground, is the differences in how people voted based on their age or economic status. From what he’s seen, many in the “working class” or “retirement age bracket” were so worried about their financial and physical security that they voted to exit the E.U. Many others – more what Dangelmaier described as middle class — felt it was crazy to leave the E.U. if for no other reason than they didn’t know what was going to happen next.

And at this point, it seems like no one has the answer to that question.

“The unknown is what’s causing all of this unease,” Dangelmaier added. “No one has a common opinion on what’s going to happen in the future and it’s disturbing.”

So This Is Really Happening?

Though the Brexit decision is all many can seem to talk about, the discussion can only go far because Article 50 has yet to be invoked by the U.K.

As part of the constitutional basis for E.U. member states, Article 50 is the section that actually lays out the details of what will take place when a member decides to leave the group – for now, both sides of the “leave” versus “stay” camps have been quiet on this next step.

Dangelmaier said that this has caused rumors to begin swirling that the entire Brexit debacle is just a political ploy to get leaders to resign so negotiations on how much England spends supporting the E.U. can begin.

There’s also the possibility of another vote taking place that could overturn the decision to leave.

For now, the only fact we know is that without Article 50 being filed there is really no Brexit to discuss.

The Business Of Uncertainty

It’s no surprise that people are somewhat torn on how they are handling this new business environment of utter confusion.

Though some are planning not to react at all until they know they have something to worry about, Dangelmaier explained, others are already planning for the worst-case scenario.

With the U.K. itself being a very international country where many of its residents hail from outside of its borders, concerns are on the rise about the country’s workforce and if there could possibly be quotas put on the number of people who remain.

Dangelmaier said he’s heard businesses voice fears of having to replace their workforce or even open locations outside of the U.K. in order to employ people from the E.U.

While it’s still too early to tell how that part of the decision will shake out, Dangelmaier added that it’s “probably going to cause major disruption to the current merchants and FinTech players.”

But the concerns that seem to be top of mind for many FinTech players right now, especially those in the middle of seeking funding, is having viable access to capital and resources.

This time of uncertainty has left many unable to really plan a next move.

In the very near future these companies may see the valuation of their businesses diminish, capital requirements change and even more investors looking to invest in the E.U. rather than directly in the U.K.

Even when it comes to big banks, people have started to worry that they are going to start moving innovation outside of the U.K. but whether that’s to Scotland or Ireland, each of which has discussed their own intentions to “-xit,” or whether it will land somewhere in France or Germany or the Netherlands, or even the U.S. is yet to be seen.

“However, with that said we all have to remind ourselves that London is the biggest eCommerce economy in the E.U. and the city leads the economy in mobile, so it’s also a very hard place to walk away from,” Dangelmaier said.

What Is The Next Step?

When it comes to the card networks and regulatory schemes, Dangelmaier pointed out that the word from these players is for everyone “Keep Calm and Carry On,” because the way payment cards are processed and settle will remain the same.

The place where many changes may actually be seen is in the realm of cross-border.

From the point of view of BlueSnap, Brexit may provide an opportunity to help merchants sell cross-border and deal with currency and taxes. Dangelmaier said BlueSnap’s gateway can help those merchants easily adapt to the changing regulatory environment and business landscape.

“People are worried about connecting to a payment provider that only works in one country or only works in one region,” he said, adding that truly cross-border services are what merchants are really looking for now.

There’s also increased concerns about shipping physical goods with the potential for crazy currency swings. Dangelmaier shared that the phrase “England is on sale” has become quite popular, with people saying everything is 10 percent off and hoping to purchase goods without having to deal with the threat of high tariffs.

When it comes to mobile, conversion remains a hot topic.

Mobile commerce players in the U.K. are now beginning to understand how to improve checkout and why their checkout page should be as important strategically as the homepage of their business, Dangelmaier emphasized.

Though merchants have spent a great deal of time worrying about shopping cart abandonment, many have admitted that they didn’t truly understand the checkout abandonment and the conversion issue.

The Checkout Conversion IndexTM, in collaboration with BlueSnap, continues to provide a benchmark for companies to get a read of where they are in the industry and how how much effort they need to put into your checkout site and strategy.

The Index insights for the U.S. market are still quite relevant for merchants in the U.K. as well, Dangelmaier said.

Businesses still have many questions about building a checkout strategy and are continuing to try to learn and get educated about how the implications of not building the checkout led to declines of conversions or customer frustrations.

This could lead to a big shift of people solely focused on building websites and shopping carts to instead focusing on how to make checkout a strategic part of their business.

“With confusion about the exit and currency, coupled with confusion about checkout, merchants are just looking for data so they can make the right decisions.”

One of the top overarching concerns coming out of Europe is the potential of other countries also jumping ship and deciding to leave the E.U. as well.

To end a very serious discussion with a bit of humor, Dangelmaier shared a few other potential names of other E.U. exit campaigns: Finnsh, Depart-ugal, Czechout, and Austria La Vista.

Through the madness – and uncertainty - it’s nice to see the Brits have at least been able to hold on to their sense of humor.



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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