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Recently really high-pitched arguments have arisen out of Brexit issue. Of course, the fact of Britain’s decision to leave EU fosters a lot of emotions due to Brexit impact on business affairs.
UK is famous for being a leading country by its market size. Especially concerning e-commerce. A lot of merchants have their businesses connected with British market. It is no surprise, that they wait with bated breath for Brexit affecting their companies operation.
Potential implications
One of the possible unwilling effects for traders is the loss of access to the European Single Market for Britain, as a result higher prices on products and increased tariffs.
Another cause for lifting prices might be pound devaluation. This could also impact the Merchant Service Charge. In fact, pound wastage would boost interchange and fees for UK-based merchants. There are some suggestions, that the most vulnerable industry would be online gaming, because there the majority of transactions are charged in non-sterling currency.
It is an understatement to say that, many British traders cooperate with European ones. EU is considered to be the Britain’s largest trading partner by cross-border online shopping and by its export amounts, which composes around 45%.
Thus, in case of European Single Market rejection, it may be expected the load of tariffs on issues entering the EU. So, British products are foredoomed to get high prices. In addition, goods, coming from UK, would have to be certified for a European market.
Besides, there is one more important question, that worries traders. It is consumer trust. British removal signifies losing the European certificate confirmation.
On the other hand, UK has won the recognition from both consumers and merchants. By virtue of its approach towards implementing business policy, Britain is well-known for following innovations and meeting the latest technologies, including online platforms. Its liberal views appeal to lots of businessmen.
As far as cross-border acquiring is concerned, it is claimed to become more difficult to function between the UK and EU countries. According to statistics, a great number of acquirers acting within UK tend to be local, whereas UK merchants, who owns physical sites in EU jurisdictions, use acquirers in countries of their activity.
Issues to make emphasize on
The most noticeable change will cover licensing and passporting areas. It must be said, e-Money and Payment Institutions are more likely to move their head-quarters to other European markets despite strong interaction of FCA and European payment businesses.
Many difficulties will raise due to passporting changes. The majority of acquirers rely on FCA regulatory licenses to support their offers across the EU. In other case, they will have to undertake new contracts and look for certain approval to act overseas.
However, the interchange regulation seems to be changed very slightly. So, international merchants, who are registered in UK can breath freely, as acquiring banks in Britain depend not on British government, but on VISA and MasterCard, which intended to oppose regulations.
One more issue, which will interest merchants is influence on data processing and security. Unfortunately, the question of UK’s offshore status for cards and payments processing still remains undetermined.
Taking into account all above-said, the UK market keeps its strong position and encourages online payments to grow. Furthermore, it is highly improbable, that extreme changes will happen on a merchants activity basis.
All in all, every decision lead to particular changes. But in terms of Britain’s market all seems to maintain favorable environment for traders. The most obvious consequence may be revealed in processing, licensing and cross-border acquiring spheres. However, with its focus on innovations and strong leading positions Britain will bear down all inconveniences.