Mollie, a prominent Dutch payment unicorn, expressed optimism about the potential for improved UK-EU relations post-Brexit, emphasizing the benefits for payment firms and merchants. Dave Smallwood, the newly appointed managing director of Mollie’s UK operations, highlighted the positive impact that warmer ties between the UK and EU could have on the industry. Smallwood, who has transitioned from roles at PayPal (NASDAQ:PYPL) and American Express (NYSE:AXP), now leads a growing team in London, overseeing a critical market for Mollie.
Smallwood’s comments align with UK Prime Minister Keir Starmer’s recent statements about resetting relations with Europe to secure a better trade deal than the one negotiated by Boris Johnson. Although the existing trade deal will not be reviewed until 2026, and Starmer has ruled out re-entering the single market and customs union, the potential for less bureaucratically intensive trade is appealing to businesses like Mollie. In light of Brexit, additional fees and data requirements have complicated transactions between the UK and EU, affecting various payment service providers.
Challenges Post-Brexit
Smallwood noted the difficulties Mollie faced in acquiring a Payment Institution licence in the UK post-Brexit, citing that some European payment service providers struggled or chose not to apply for UK licenses. Despite these challenges, Mollie has continued to grow, with significant triple-digit year-on-year growth in the UK during the first quarter of this year. The company partners with major brands such as Mazda and Gymshark in the UK and maintains a strong presence in multiple European countries.
Industry Impact and Future Prospects
Smallwood emphasized the hardships merchants face due to Brexit-related bureaucracy when trading between the UK and Europe. The additional customs forms and regulatory hurdles have complicated international sales, reducing opportunities for businesses. He stated,
“I do think that a better Euro/UK relationship would be better for merchants full stop. The merchants that are selling internationally and working to sell goods from the UK into Europe would love that because that hasn’t been easy for them to deal with over the last few years.”
Smallwood’s vision for improved UK-EU relations echoes sentiments from past discussions about the fintech industry’s resilience and adaptability post-Brexit. Historical data reveals that Mollie’s valuation was $6.5 billion in 2021, during a robust period for fintech, which has since experienced market depressions. The company’s strategic expansion and partnerships across Europe underscore its commitment to navigating post-Brexit challenges.
In conclusion, fostering closer ties between the UK and EU could significantly benefit payment firms like Mollie by reducing operational complexity and expanding market opportunities. With the UK payments industry already deeply interlinked with Europe, addressing the bureaucratic challenges that arose from Brexit could streamline processes and boost cross-border trade. For merchants, simpler regulations could enhance international sales, offering a brighter future for businesses navigating the post-Brexit landscape. Enhanced UK-EU relations may well be the key to unlocking these opportunities, ensuring continued growth and efficiency in the payments sector.
