As the chaos around Brexit continues, SafeCharge is working on creating solutions to help our merchants weather the storm.
A considerable degree of uncertainty surrounds the nature of the United Kingdom’s future relationship with the European Union. It appears unlikely at this point that the deal proffered by the Prime Minister of the United Kingdom will be ratified by Parliament. While Parliament is averse to the idea of leaving the EU without an agreement, it is impossible to predict what will happen in the coming weeks.
The European Union has said that in ‘the absence of an agreement on a withdrawal agreement, or if the Withdrawal Agreement is not ratified in time by both parties, there will be no transition period and EU law will cease to apply to and in the United Kingdom as of 30 March 2019’. The EU advises that ‘everybody concerned needs to be prepared for the withdrawal of the United Kingdom from the European Union on 30 March 2019’.
In these circumstances, it is important to plan for a variety of scenarios, including; a regime similar to the one supported by the Prime Minister, membership of the European Economic Area and a scenario in which the United Kingdom withdraws without any agreement.
What are the market risks?
Ensuring continuity of services for our clients is at the very heart of what we do at SafeCharge. Ensuring that we can continue to offer our services in the United Kingdom, the EU 27 and EEA after Brexit has been an area of particular focus for the leadership team. At present, EU rules on ‘passporting’ allow some financial services institutions, located in one Member State, to offer their services in the EU/EEA. This arrangement is almost certain to change. There may be an agreement that includes enhanced measures for mutual recognition, but it seems very unlikely that the EU will allow free movement of services without requiring acceptance of freedom of movement for people, capital and goods.
There is a very real risk that the ability of acquirers to offer services across the United Kingdom’s borders will end upon the point of withdrawal, or at the end of any transition period that may come into effect. The European Banking Authority has in the past expressed concerns about the level of preparedness in some parts of the financial system.
How are we handling the risk?
To protect against this risk, SafeCharge now offers services from within the EU and also from within the UK. This approach avoids the need to provide services across the UK’s borders and insulates our services from the risk of disruption. Our UK based, FCA licenced Institution, SafeCharge Financial Services Limited is available to complement the services currently offered through our Cyprus based licenced Institution, SafeCharge Limited.
To facilitate an orderly transition in the event of a ‘hard’ or ‘no-deal’ Brexit, SafeCharge has received Transitional Authorisation to participate in the FCA’s ‘Temporary Permissions Regime’. This means that SafeCharge Limited will be able to continue to operate in the UK in the absence of a withdrawal agreement.
It is anticipated that many of our clients will address Brexit in a similar manner and establish an additional presence in either the EU 27 or the UK as required. We are keen to support them in their preparations. We will continue to offer trusted, reliable and flexible payment solutions and meet the challenges and opportunities that arise in partnership with our clients.
If you’d like to find out more about how SafeCharge can support you, please contact us now.