Payment providers and fintech companies in the UK have been put on notice by the French central bank, in an email from the bank’s regulatory unit that questioned firms’ intentions in France post-Brexit.
The email seen by City A.M., which was sent last week to firms highlighted by “UK authorities as providing payment or electronic money services in France”, requested information regarding their Brexit contingency plans.
Without an European licence, these firms currently operate in the EU under passporting laws, which protect their rights to function under their British authorisation and are set to expire at the end of 2020.
Michael Kent, chief executive of London fintech firm Azimo which was one of the email's recipients, told City A.M. that it was “a timely reminder” for the political establishment and the fintech industry to consider the potential disruptive impact of Brexit.
The following survey that fintechs were expected to fill out asked for information like where the company might choose as its next base within the European Economic Area, and by which date it expects to be authorised to operate within the EU.
Many fintechs have already taken steps to achieve European authorisation, including star banking challenger Revolut which chose to apply for a licence in Lithuania before attempting an application in the UK.
Charlotte Crosswell, CEO of industry body Innovate Finance said that while the move from France was expected, "it underlines the fact that time is running out for fintech companies to get information from the Brexit process on what happens next, and how they should prepare."
"These are in many cases smaller companies with limited resource and we can not expect them to have a dual track process while negotiations continue as costs are too high."
Kent agreed, adding: "We need reassurance from government and policymakers that they will do all they can to ensure that the London remains the undisputed leader of global fintech and financial services."