Almost two weeks after Britain voted to leave the EU, many in the financial industry have disagreed on the impact on London’s banks. “London has committed suicide as a leading fintech centre,” according to Jochen Siegert, chief operating officer of Traxpay, a Frankfurt-based Payments
Payments
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
Read this Term platform.
The Financial Times reported today that Germany’s digital entrepreneurs not only believe that “London is finished”, but that they can steal its crown as Europe’s centre of fintech. This confidence is particularly felt in Berlin, the hub of Germany’s tech industry.
Europe's Strongest Economy
Put simply, if the UK loses access to the European single market, London shrinks as a global banking centre and investment in their start-ups will stop.
Cornelia Yzer, Berlin’s economics minister, said: “Berlin will exploit the opportunity provided by Brexit. These companies need to be in the heart of Europe, and where is better than the capital of Europe’s strongest economy?”
For example, TransferWise, a London-based money transfer company, is considering the option of moving to Berlin, according to Financial Times sources. The company’s co-founder Taavet Hinrikus tweeted on Sunday that “Ireland, Switzerland and others” had been “reaching out and tempting TransferWise to start or move operations there”.
Higher Returns
TransferWise is not alone. Berlin Partner, an agency which promotes investment in the city, reported that on the day after the Brexit vote it was contacted by five London-based fintech start-ups who said their investors were forcing them to consider relocating because “capital must go where the returns are higher.”
Berlin has in recent times become home to a multitude of small German companies attempting to disrupt the business models of the established banks, through innovations such as peer-to-peer lending, crowd investing and online marketplaces. The city has proved a big pull for web entrepreneurs across the world largely due to cheap rents and was positioning itself as a rival to London even before Brexit.
A recent survey conducted by EY suggests it may be succeeding, naming Berlin as Europe’s start-up capital. Berlin’s tech companies received €2.15 billion in venture capital funding last year, exceeding the €1.77 billion attracted by London.
Comparatively Small Sector
However, the sector remains relatively small and out of a total of 12,000 fintechs in the world only 300 are in Germany, according to PwC’s management consultancy. In addition, only one German fintech financing round topped $50 milion in 2015 whereas in the US, 38 managed to do so.
Up until now, London has led the way in fintech due to its challenger banks and a vast range of Blockchain
Blockchain
Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamper with. The Evolution of BlockchainBlockchain was originally invented by an individual or group of people under the name of Satoshi Nakamoto in 2008. The purpose of blockchain was originally to serve as the public transaction ledger of Bitcoin, the world’s first cryptocurrency.In particular, bundles of transaction data, called “blocks”, are added to the ledger in a chronological fashion, forming a “chain.” These blocks include things like date, time, dollar amount, and (in some cases) the public addresses of the sender and the receiver.The computers responsible for upholding a blockchain network are called “nodes.” These nodes carry out the duties necessary to confirm the transactions and add them to the ledger. In exchange for their work, the nodes receive rewards in the form of crypto tokens.By storing data via a peer-to-peer network (P2P), blockchain controls for a wide range of risks that are traditionally inherent with data being held centrally.Of note, P2P blockchain networks lack centralized points of vulnerability. Consequently, hackers cannot exploit these networks via normalized means nor does the network possess a central failure point.In order to hack or alter a blockchain’s ledger, more than half of the nodes must be compromised. Looking ahead, blockchain technology is an area of extensive research across multiple industries, including financial services and payments, among others.
Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamper with. The Evolution of BlockchainBlockchain was originally invented by an individual or group of people under the name of Satoshi Nakamoto in 2008. The purpose of blockchain was originally to serve as the public transaction ledger of Bitcoin, the world’s first cryptocurrency.In particular, bundles of transaction data, called “blocks”, are added to the ledger in a chronological fashion, forming a “chain.” These blocks include things like date, time, dollar amount, and (in some cases) the public addresses of the sender and the receiver.The computers responsible for upholding a blockchain network are called “nodes.” These nodes carry out the duties necessary to confirm the transactions and add them to the ledger. In exchange for their work, the nodes receive rewards in the form of crypto tokens.By storing data via a peer-to-peer network (P2P), blockchain controls for a wide range of risks that are traditionally inherent with data being held centrally.Of note, P2P blockchain networks lack centralized points of vulnerability. Consequently, hackers cannot exploit these networks via normalized means nor does the network possess a central failure point.In order to hack or alter a blockchain’s ledger, more than half of the nodes must be compromised. Looking ahead, blockchain technology is an area of extensive research across multiple industries, including financial services and payments, among others.
Read this Term, machine-learning and data-mining companies. In 2015, the British fintech sector generated £6.6 billion in revenues and attracted £524 million in investment, according to EY.
However, one of the main reasons London has thrived is its proximity to the large global banks which use the UK as a gateway to 'passport' their goods and services to Europe’s single market of 500 million customers. Many now doubt the banks will be able to retain their European passport if Britain leaves the EU.
With a post-Brexit Britain likely to seek curbs on immigration, foreign IT staff may also find it easier to work in Berlin than London. If the UK imposes constraints on attracting international talent, it may lose out against cities such as Berlin.
Undoubtedly, time will tell.
Almost two weeks after Britain voted to leave the EU, many in the financial industry have disagreed on the impact on London’s banks. “London has committed suicide as a leading fintech centre,” according to Jochen Siegert, chief operating officer of Traxpay, a Frankfurt-based Payments
Payments
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
Read this Term platform.
The Financial Times reported today that Germany’s digital entrepreneurs not only believe that “London is finished”, but that they can steal its crown as Europe’s centre of fintech. This confidence is particularly felt in Berlin, the hub of Germany’s tech industry.
Europe's Strongest Economy
Put simply, if the UK loses access to the European single market, London shrinks as a global banking centre and investment in their start-ups will stop.
Cornelia Yzer, Berlin’s economics minister, said: “Berlin will exploit the opportunity provided by Brexit. These companies need to be in the heart of Europe, and where is better than the capital of Europe’s strongest economy?”
For example, TransferWise, a London-based money transfer company, is considering the option of moving to Berlin, according to Financial Times sources. The company’s co-founder Taavet Hinrikus tweeted on Sunday that “Ireland, Switzerland and others” had been “reaching out and tempting TransferWise to start or move operations there”.
Higher Returns
TransferWise is not alone. Berlin Partner, an agency which promotes investment in the city, reported that on the day after the Brexit vote it was contacted by five London-based fintech start-ups who said their investors were forcing them to consider relocating because “capital must go where the returns are higher.”
Berlin has in recent times become home to a multitude of small German companies attempting to disrupt the business models of the established banks, through innovations such as peer-to-peer lending, crowd investing and online marketplaces. The city has proved a big pull for web entrepreneurs across the world largely due to cheap rents and was positioning itself as a rival to London even before Brexit.
A recent survey conducted by EY suggests it may be succeeding, naming Berlin as Europe’s start-up capital. Berlin’s tech companies received €2.15 billion in venture capital funding last year, exceeding the €1.77 billion attracted by London.
Comparatively Small Sector
However, the sector remains relatively small and out of a total of 12,000 fintechs in the world only 300 are in Germany, according to PwC’s management consultancy. In addition, only one German fintech financing round topped $50 milion in 2015 whereas in the US, 38 managed to do so.
Up until now, London has led the way in fintech due to its challenger banks and a vast range of Blockchain
Blockchain
Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamper with. The Evolution of BlockchainBlockchain was originally invented by an individual or group of people under the name of Satoshi Nakamoto in 2008. The purpose of blockchain was originally to serve as the public transaction ledger of Bitcoin, the world’s first cryptocurrency.In particular, bundles of transaction data, called “blocks”, are added to the ledger in a chronological fashion, forming a “chain.” These blocks include things like date, time, dollar amount, and (in some cases) the public addresses of the sender and the receiver.The computers responsible for upholding a blockchain network are called “nodes.” These nodes carry out the duties necessary to confirm the transactions and add them to the ledger. In exchange for their work, the nodes receive rewards in the form of crypto tokens.By storing data via a peer-to-peer network (P2P), blockchain controls for a wide range of risks that are traditionally inherent with data being held centrally.Of note, P2P blockchain networks lack centralized points of vulnerability. Consequently, hackers cannot exploit these networks via normalized means nor does the network possess a central failure point.In order to hack or alter a blockchain’s ledger, more than half of the nodes must be compromised. Looking ahead, blockchain technology is an area of extensive research across multiple industries, including financial services and payments, among others.
Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamper with. The Evolution of BlockchainBlockchain was originally invented by an individual or group of people under the name of Satoshi Nakamoto in 2008. The purpose of blockchain was originally to serve as the public transaction ledger of Bitcoin, the world’s first cryptocurrency.In particular, bundles of transaction data, called “blocks”, are added to the ledger in a chronological fashion, forming a “chain.” These blocks include things like date, time, dollar amount, and (in some cases) the public addresses of the sender and the receiver.The computers responsible for upholding a blockchain network are called “nodes.” These nodes carry out the duties necessary to confirm the transactions and add them to the ledger. In exchange for their work, the nodes receive rewards in the form of crypto tokens.By storing data via a peer-to-peer network (P2P), blockchain controls for a wide range of risks that are traditionally inherent with data being held centrally.Of note, P2P blockchain networks lack centralized points of vulnerability. Consequently, hackers cannot exploit these networks via normalized means nor does the network possess a central failure point.In order to hack or alter a blockchain’s ledger, more than half of the nodes must be compromised. Looking ahead, blockchain technology is an area of extensive research across multiple industries, including financial services and payments, among others.
Read this Term, machine-learning and data-mining companies. In 2015, the British fintech sector generated £6.6 billion in revenues and attracted £524 million in investment, according to EY.
However, one of the main reasons London has thrived is its proximity to the large global banks which use the UK as a gateway to 'passport' their goods and services to Europe’s single market of 500 million customers. Many now doubt the banks will be able to retain their European passport if Britain leaves the EU.
With a post-Brexit Britain likely to seek curbs on immigration, foreign IT staff may also find it easier to work in Berlin than London. If the UK imposes constraints on attracting international talent, it may lose out against cities such as Berlin.
Undoubtedly, time will tell.
