The financial technology sector is one of fastest-growing parts of London's economy, so it's important to get an idea of how it is being affected, both now and in the future, by Brexit. This week, we're talking to Daniel Mayhew, the UK country manager for international payments company Payoneer. While the other fintech companies that we've spoken to were set up in London, Payoneer is a global company headquartered in New York. However, since it recently opened an office in London, it seemed a good time to talk to Mayhew about how Brexit was affecting its business.
Payoneer's main role, says Mayhew, is to "help remove barriers to cross-border commerce". It does this by offering payments solutions that are "a more digital, cheaper, faster and more transparent solution" and one that is "more suitable for modern day global e-commerce merchants". It also enables businesses of any size "to pay and be paid locally" through Payoneer's "connection to the in-country domestic clearing networks". This has the added benefit of "removing reliance and exposure to the dated and very expensive cross-border banking payment infrastructure". Overall, Payoneer promises "zero exposure to intermediary banking fees" and "significantly lower transaction costs".
"Following the Brexit vote, a lot of businesses in the UK have been concerned about their relationship with the EU", says Mayhew. However, the vote has also got "the UK business community thinking more about the UK as an export nation". Indeed, "as people are starting to think about what could happen post-Brexit, there's more interest in looking further across the world for new markets, such as Asia" while others have started thinking about "going global". At the same time, "the rhetoric from the government is that the UK is more focused on exports that ever before".
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Exports have also been boosted by the dramatic post-referendum fall in the value of sterling, which has left the pound "at a record low against several currencies including an all-time low against the euro and a 31-year low against the dollar". This has reduced the price of British exports leading to "increased interest in in cross-border trade from the UK". Demand for UK-branded products from emerging and mature markets is "very robust", which in turn is benefitting Payoneer as "businesses of all sizes in the UK start to realise the benefits of utilising our platform to grow their business worldwide".
Overall, Mayhew thinks that Payoneer's clients are generally "upbeat and positive" and believe in a "future filled with opportunity". He also thinks that "the numbers indicate that the UK is in the early stages of a globalisation boom"; a trend that "will continue for years". He notes that 2016 was yet another "record-breaking year for online e-commerce sales" and that "new leaders in global trade are emerging every year". British firms are also "analysing how they've worked in the past, and are discovering how they can make a success of their new reality". If they can learn to emulate the success of their counterparts in China, they could do even better.
One example of how attitudes have changed within a very short time comes from a meeting that Mayhew recently had with "a very successful multi-million pound clothing company that has been in business for over 20 years". Until now, it had previously "only been focused on the UK". However, it has now "started to realise that it really needs to shift the focus towards the global marketplace", and has "chosen Payoneer to help with its international growth ambitions".
While companies generally hope that the UK can maintain good trade links with the rest of Europe after Britain leaves the EU, it isn't a particular worry for Payoneer as "the digital economy is border-agnostic". As a global company, Payoneer also has plans in place to deal with the possible loss of financial passporting, so it is "not a big concern".
Mayhew is also confident that the fintech sector as a whole will continue to boom "with lots of service providers eager to support international payment requirements". Indeed, "marketplaces offering fulfillment services via responsive mobile optimised website continue to grow" and "there are many locally-centric payments methods to choose from".
