Future of PayTech investment Right now the UK is anxious about the implications of a potential “Brexit” from Europe. With London wishing to maintain its reputation as a top global location for FinTech – and this applies to PayTech too – there is concern that FinTech businesses might relocate to elsewhere in Europe, although others cite back to similar concerns over the decision not to adopt the Euro. Whatever the decision in the referendum on 23rd June, some factors will continue to stand in favour of the UK for PayTech businesses, such as London’s strong international position in foreign exchange, for example and the health of the UK’s asset finance and investment industry. UK PayTech start-ups may also benefit from some of the general conditions to support innovation where the UK is recognised as performing well. These include competition conditions, as measured by new start-up rates and 15 16 business churn, entrepreneurship and its flexible approach to regulating new businesses. In its recent evaluation of the international FinTech sector, Ernst and Young ranked the UK as the leading global FinTech ecosystem, presenting itself as a good all-rounder in the attributes of capital, talent, policy and demand. The report cites its well-rounded FinTech ecosystem with an effective network of FinTech hubs, proximity to global financial hub offering a wealth of talent and expertise and particular competitive advantage in its government and regulatory policy.17 A unique assets of the UK’s PayTech sector is the existence of the world’s only Payments Systems Regulator (PSR). Its focus on promoting competition and innovation while protecting user interests and its approach to engaging with the whole payments ecosystem has created an unexpected benefit: the payments community is taking responsibility for driving its own change in a customer-centric, commercially attractive and innovative way. Other factors also suggest a positive future for PayTech in the UK. These include reduced trust in the traditional banking system and the spread and capability of smartphones and wearable technologies as payment devices. On top of this the increasing demand from consumers for personalised, seamless and on-demand payment services, which is unlikely to diminish and, with many established businesses lacking the ability to provide this, the opportunity for disintermediation is considerable. Conclusion We conclude that the UK is punching well above its weight when it comes to attracting investment in PayTech; that UK companies are more likely to remain independent than US companies; and that if you want to launch a company in the most popular hub for PayTech companies, you should come to the UK. 15 Source: NESTA report, The wider conditions for innovation in the UK - How the UK compares to leading innovation nations, 2009 16 Source: www.citie.org 17 Source: Ernst & Young, UK FinTech On the cutting edge, 2016 EPA WHITE PAPER, PAYTECH INVESTMENTS, COPYRIGHT © MAY 2016 9