TransferWise, the cross-border payments unicorn, has announced it’s in the process of applying for a Belgian license, in order to ensure a continuity of service to its European customers in the event of a no-deal Brexit.
The company also plans to open an office in the Belgian capital, although has pledged to keep its London office open, where it employs over 200 people. In a statement, TransferWise’s CEO and co-founder, Kristo Käärmann, said:
“Brussels is at the heart of all EU affairs, so establishing an office in the city makes great sense for us. The National Bank of Belgium impressed us with its understanding of the payments sector and openness to innovation, while at the same time being a strong and trusted regulator. We’re keen to build a similarly productive relationship with the NBB to the one we already have with the UK’s FCA.”
Speaking to TNW, a TransferWise spokesperson confirmed that the type of license the company would obtain. It intends to apply for a Belgian Payment Institutions Licence, which is similar to the license it presently holds in the UK.
As things stand right now, this is undoubtedly a sensible move from TransferWise. Brexit is turning out to be the disaster many rightly predicted it would be. As a company depended upon by millions for transferring remittances, salaries, and more, TransferWise can’t rely on Westminster to pass a deal that will work for Britain’s thriving and economically valuable fintech sector.
No-deal Brexit, once regarded as an improbable and disastrous outcome, now seems eminently plausible. As we enter the twilight months of Britain’s membership in the EU, a viable withdrawal agreement that could win the support of the fractious and factional parliament remains elusive.
TransferWise can’t be complacent about a potential bad deal, either. The hard-Brexit wing of the Tory party, represented by Boris Johnson, have advocated for a “Canada Plus” free trade deal, which would ensure that goods flowing between the UK and the EU are not subject to tariffs. While this deal would work for manufacturers, it doesn’t do much for the crucial services sector of the economy, which TransferWise is a small, but important part of.
This fear is compounded by the fact that services — particularly financial services, but also media and entertainment — is one area in which the EU’s member states are likely to play hard ball.
So, in short, if TransferWise didn’t cover its back, it would inevitably struggle to offer its existing services to European customers after March 29, 2019. And while there are vague glimmers of an extension to Article 50 — and perhaps even a “People’s Vote” on the final deal — it can’t afford to gamble on the outcome of Brexit.
Hardcore leavers, like Angela Leadsom and Dan Hannan, once described the prospect of companies leaving Brexit Britain as “Project Fear.” But as we can see from this move from TransferWise, Britain’s startups are genuinely afraid.