The UK payments industry is world-leading, and its Fintech sector is estimated by HM Treasury to be worth £6bn. The UK is likely to leave the EU in 2019 and when it does, it could potentially lose its passporting rights to the European single market. Without such rights, many regulated payments companies in the UK will be unable to deliver products and services across the European Economic Area (EEA). The Emerging Payments Association (EPA) believes restrictions of passporting rights will damage the emerging payments industry significantly.
However, if passporting rights are lost to UK payments companies, then where should these companies move to become regulated so they can continue to access the EEA? To answer this question the EPA has published a report comparing the most viable options for companies seeking to become authorised in the EEA. Having reviewed 15 countries, the report undertakes a ‘deep dive’ analysis of the six best countries to be considered.
The report concludes that the UK is the best jurisdiction in which to be a regulated payment company. It is the only country that scores positively across all the selection criteria used. However, if push comes to a Brexit shove, which is definitely on the cards, then every regulated payments company (PSP) will have to consider its options. As the report outlines, there are some very good alternatives to the UK available and some specialists to ease the path.
The UK government needs to be aware that if passporting is not addressed as part of the Brexit negotiations then these real and viable options could entice many of the UK Treasury’s estimated 60,000 FinTech employees to move their operations abroad.
At the Press Launch on January 11th in London Bridge the authors will present the findings, reveal the six alternative countries, and provide full copies of the report. Members of the syndicate behind the report and of the EPA’s Advisory Board will be attending to answer questions. Embargoed copies are available in advance to select members of the press.