Commentary The headline indications from the analysis of this research is that the UK is an extremely attractive place in which to set up a payments business. The US and UK dominate payments in western markets. The US has a population of 320m, five times greater than the UK. In proportion to its population, however, the UK supports 2.5 times as many payments businesses. The rate of growth from 2010 – 2014 is also comparably faster in the UK than the US. The percentage of PayTech start-ups basing themselves in the UK has almost doubled. And the lifecycle of UK PayTech companies also exceeds anywhere that of PayTech start-ups elsewhere. % % % 2010 58 12.5 29.5 PayTech US UK other start-ups % % % 2014 61 28 11 of PayTech of PayTech of PayTech start-ups start-ups start-ups were US were UK were other The FinTech context FinTech is booming globally, with investment pouring in from around the world. The number of start-ups and deals are growing at a fast pace: in 2014 alone the total value invested globally in the FinTech sector was $13.7bn and from 2010 the growth of funding has been growing at a rate of 45%.8 The UK FinTech sector in particular is currently thriving due to unique drivers such as the effect of digital connectivity, customer dissatisfaction with banks, and a lack of innovation and investment by incumbent providers. Also, regulatory changes and the requirement for fraud and identity protection are creating demand for a range of new and innovative solutions. By the end of 2014, the UK and Ireland were the fastest-growing region for FinTech investment. Deal volumes here have been growing at 74% a year since 2008, compared with 27% globally and 13% in Silicon Valley. From 2008 to 2013, the value of UK FinTech investment increased nearly eightfold, to US$265 million in 2013 – a rate of 51% a 9 year, nearly twice the global average (26%), and more than twice that of Silicon Valley (23%). Within Europe, London is the capital of the tech start-ups where 1,009 start-ups were launched between 2005 and 2014. It is followed by 10 Paris with just 281 firms, Dublin with 162 and Madrid with 139 start-ups. 8 Source: CB Insights 9 Source: UK Government 10 Source: Accourt research EPA WHITE PAPER, PAYTECH INVESTMENTS, COPYRIGHT © MAY 2016 6