Adyen has achieved its U.K. banking license, giving merchants the opportunity to offer cash advances to small and medium enterprises in the nation, which is similar to the banking license they already have in the Netherlands, allowing for almost instantaneous processing of merchant payments. This move stands in contrast to Revolut, one of the most prominent fintech firms in the U.K., which has had difficulty in getting permission from the Bank of England.
Adyen, a Dutch payments giant, announced on Thursday that it had gained approval from the U.K. for a banking license, an indication of a move on the company's part to deeper involvement in the banking sector. With this license, Adyen's merchants will have the ability to offer cash advances to small and medium-sized enterprises in the U.K., as well as continuing to offer services in line with its EU business under the U.K.'s Temporary Permissions Regime after Brexit. Already holding a license in the Netherlands as an acquiring bank, Adyen can process merchant payments more instantly than relying on banking partners, who may require several days to settle payments. Customers of U.K.-based merchants can also receive bank accounts, virtual or physical cards, and cash flow and expense management through Adyen. Mariëtte Swart, Adyen's chief legal and compliance officer, commented on the permit approval, saying, "The U.K. is a key market for Adyen and we're excited to cement our position here with this banking authorisation. It will strengthen our ability to help domestic and international businesses achieve their ambitions faster. It's another stride towards Adyen becoming a full spectrum global financial technology platform." A competitor to U.S. payments giant Stripe, Adyen is one of the largest technology firms in Europe, with a market capitalization of 23.4 billion euros ($25 billion). However, its first-half earnings report showed the slowest revenue growth on record, causing a 39% drop in its shares on August 17, which eliminated 18 billion euros from Adyen's market value. On Thursday, the company's shares closed down slightly more than 2% in Amsterdam. The permit approval coincides with Revolut, a U.K. fintech firm, facing difficulties in obtaining a license from the Bank of England; Revolut applied two years ago, yet has encountered delays due to various regulatory concerns, such as its late filing of accounts and internal corporate culture problems. The CFO at the time of the delayed accounts has since left the company, and Revolut has claimed to have improved its corporate culture internally.
Correction: Adyen's shares fell as much as 39% on Aug. 17. An earlier version misstated the date.
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