GlobalData Plc
  • “Hard” Brexit may incur unwelcome consequences for UK payments market

Recent regulatory and structural changes to the UK payments market, combined with growing uncertainty surrounding Brexit, mean the payment card space faces an unclear future in spite of current prosperity, according to research and consulting firm GlobalData.

The company’s latest report states that the UK cards market is highly mature, with 2.5 payment cards across credit, debit, and charge cards per person in the market. Despite this size, it continues to grow strongly, having recorded a CAGR of 2.1% from 2010 to 2015 in terms of overall card numbers.

Samuel Murrant, Senior Financial Analyst for GlobalData, explains: “The UK market is highly developed and innovative, but its strong position may be at risk in future as the UK’s relationship with the EU – and therefore its financial regulatory environment – remains unclear.

“The UK payments market is strong in several ways, but has changed in recent years. For example, Mastercard is buying VocaLink, bringing unknown changes to the payments infrastructure, and there is a new payments regulator working on updating the regulatory framework. Additionally, the EU financial regulations may soon be rescinded, and it is not clear what their replacement will be.”

The UK government has indicated that it is intending to push through a “hard” Brexit along with a “great repeal bill” to make all EU law non-applicable in the UK. While some EU law will be retained, it is unclear which (if any) EU financial regulations will be retained. This uncertainty makes it difficult for UK banks to plan for the short term, and alongside the potential loss of easy “passporting” of services to the EU, may cause some UK players to leave the country until the market settles.

Murrant concludes: “Although the UK’s payments market is one of the most developed in the world for the time being, its leading status may soon be compromised. A post-Brexit contraction in the economy – which may result if banks flee the market – could see consumers flock back to cash in order to better control their spending, for example.”

Related Intelligence

Want more Insight like this?

Our interactive subscription platform has the most comprehensive data and analysis in your industry.

Request a Demo

Related Consulting

How can we help your business?

Our consultants are skilled in every specialist market niche to deliver solutions specifically designed for your individual requirements.

Request a Callback

Media Enquiries

If you are a member of the press or media and require any further information, please get in touch, as we’re very happy to help.

Emailpr@globaldata.com
PhoneEMEA: +44 207 832 4399
PhoneAPAC: +91 40 6616 6809
Onlinecontact online

56% of #consumers are concerned about the impact of diet. Join us for more insight @incosmetics #cosmetics #trends… https://t.co/wJOJOqYIJF