Adyen has bolstered its capabilities in the U.K. by procuring a banking license, allowing its merchants to give out cash advances to small and medium-sized businesses in the region. This measure buttresses its existing banking license in the Netherlands, which permits near-instant processing of merchant payments. This expansion takes place as Revolut, a prominent fintech company in the U.K., faces challenges in attaining a license from the Bank of England.
Adyen, a Dutch payments giant, received approval for a banking license in the U.K. on Thursday, signifying its noteworthy plunge into the financial sector. The license will enable Adyen's merchants to provide cash advances to small and medium-sized enterprises in the country. It will also bring Adyen in line with the Temporary Permissions Regime, which will remain applicable after Brexit. In its capacity as an acquiring bank in the Netherlands, Adyen has the ability to rapidly process payments, bypassing the usual banking partner settlement times of multiple days. Adyen's U.K. merchants can also offer bank accounts, physical and virtual cards, and cash flow and expense management. Mariëtte Swart, Adyen's chief legal and compliance officer, noted, "The U.K. is a key market for Adyen and we're excited to cement our position here with this banking authorization. It will strengthen our ability to help domestic and international businesses achieve their ambitions faster." Marketed as a competitor to U.S. payments titan Stripe, Adyen has a market capitalization of €23.4 billion ($25 billion). The firm has been working to regain its status after its first-half earnings uncovered the weakest revenue growth to date. Consequently, Adyen's stock plummeted by as much as 39% on August 17th, resulting in a €18 billion decline in its market value. The company's shares were down over 2% as of Thursday's close. As for Adyen's permit approval, one of the U.K.'s leading fintech companies, Revolut, has been encountering difficulties obtaining a license from the Bank of England. Revolut's application for a license was filed two years ago, but is still under review due to many potential issues, such as late filing of accounts and problems with corporate culture. Revolut has since worked to ameliorate its corporate culture and saw its previous chief financial officer, who was presiding at the time of the delayed accounts, leave this year. Correction: Adyen's shares dropped 39% on Aug. 17th. An earlier version was incorrect.
Comments