Banking transactions without license don’t satisfy the startups
TransferWise, an international money transfer company headquartered in London is applying for a new license in Brussels.It is made for the case of restriction of the UK in non-cash settlement with European countries. This situation is possible, because the state is preparing to leave membership in the European Union on 29 March 2019.
TransferWise’s plan is to open a small additional office in Brussels, where the company applies to the regulator, the National Bank of Belgium, for a “License for pay offices”.
By the way, this is not such a big problem for such a large company as TransferWise. The money transfer service already has nine offices and has 1400 people around the world.
One of the advantages of EU membership, and what undoubtedly benefited startups from the US, is the so-called “certification” of financial services. It implies a certain level of harmony of financial regulation in the EU and means that companies authorized in any European Union state can offer their services freely in any another country with minimal additional requirements.
In addition, these “passports” are the basis for the single market of financial services of the EU. Thus, if the UK leaves it, the fintech companies of the state that trade in the EU or plan to do so will need a new license of a member state of the European Union.
According to TransferWise co-founder and CEO, Cristo Kärmann Brussels is at the heart of all EU affairs, so the establishment of an office in the city has a great impact on the organization. The National Bank of Belgium impressed the company with its understanding of the payment sector and openness to innovation. According to the representatives of the corporation, they will strive to build the same productive relationship with the NBB as they already have with the British Bank.
Banking transactions without license are not for Revolut
Fintech startup Revolut is also interested in the license for banking transaction. This is a platform launched in the summer of 2015 by Nikolai Storonskiy in London. In December 2018, the project received a European banking license. The application was submitted in the first half of 2018 and was approved by the Bank of Lithuania.
Using this license Revolut will be able to implement several new services in Lithuania, Great Britain, Germany, France and Poland. Electronic wallets and debit cards of the startup will be available for residents of these countries. Also in his plans the chief of Revolut sees the expansion of the range of services and the addition of overdrafts and credits.
In addition, thanks to the obtained license, startup users become members of the European deposit insurance system. It protects holders of funds, in case of loss of money, they are entitled to receive up to €100 thousand of compensation. According to experts, such insurance wiil give Europeans an opportunity not to be afraid to transfer large sums of money to accounts in Revolut.
By the way, according to the latest news, Revolut may enter the Russian market in 2019.