Cross-border Payment Sector Endures Brexit Adjustments
Impact of Brexit on Payment Companies and Cross-Border Transactions
The United Kingdom's departure from the European Union (EU) on January 1st has brought about significant changes in the financial sector, particularly for payment companies. A recent analysis of 41 such companies reveals that two, iMoneyTrans and ACE Money Transfer, have temporarily halted services due to Brexit.
This disruption is likely to have a substantial impact on cross-border purchases, particularly among small traders and their payment providers. ACE Money Transfer, for instance, has temporarily halted services from outside the UK, affecting customers wanting to transfer money from Europe to the UK. Similarly, iMoneyTrans has stopped online services for sending money from the UK for approximately three weeks.
Other companies have taken a more drastic step, ending cross-border trade with the UK indefinitely due to increased costs or new regulatory barriers. Notable among these are Adyen, Klarna, and Stripe. In e-commerce, many companies have paused shipping to or from the UK due to late information about changing VAT requirements.
The UK's status as a non-EU country means that details about financial services operating across borders are still being worked out. On January 1st, most cross-border payments companies were ready for the Brexit transition, but as the year progresses, more coverage and potential surprises related to industry developments are expected.
Cross-border purchases across UK corridors are likely to be impacted by these changes, and it remains to be seen how the situation will evolve in the coming months. As always, it is advisable for businesses and individuals to stay informed and adapt to these changes as they unfold.
