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UK FinTechs welcome visa scheme announced in 2021 budget

By Sunniva Kolostyak

March 04, 2021

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The FinTech sector in the UK has welcomed the announcement of a visa scheme aimed to attract tech talent, unveiled as part of Chancellor Rishi Sunak’s second Budget.

Sunak, the Chancellor of the Exchequer, unveiled a budget that he hopes will help the country recover from the financial impact of Covid-19. For the FinTech industry, the standouts were a fast-track visa scheme, the contactless payment limit increase, a Covid-19 fraud taskforce and of course, various funding support. as well as a £375 million initiative to use public money to match venture capital funding for high-potential tech companies.

UK government proposals on digital identityCommenting on the announcements, Jed Rose, General Manager of EMEA, Airwallex said the high skilled visa scheme is welcome news, particularly as more than two-fifths of Britain’s FinTech workforce are migrants.

“Attracting and retaining world-class tech talent accelerates the UK’s ability to innovate in the business banking sector. Losing access to global talent would be a huge blow for UK-based FinTech companies,” Rose said. “However, we feel that today’s Budget should have had an even greater focus on its FinTech initiatives.”

“The government needs to quickly develop a unified strategy for the FinTech community and work with the relevant stakeholders to implement it. From progressive regulation and incentives to a focus on talent and tax-efficient vehicles, the UK needs to appeal to fast-growth companies. At a time when Brexit and Covid-19 have drastically altered the business landscape, the UK does not want to lose its position in the market. FinTech should continue to be a driving force for the UK with creating a global hub of quality jobs and financial inclusion.”

Daumantas Dvilinskas, CEO and Co-Founder of TransferGo, added that the visa, alongside last week’s Kalifa Review, signals a commitment to long-term investment, but safeguarding growth and establishing the UK as a world leader in FinTech will require an attractive and prosperous environment for talent from all walks of life.

“True innovation comes through diversity of thought and background, and as a migrant myself, the budget was missing this final piece: a reassurance to foreign talent that there is a home for them in the UK FinTech community.”

Curtis Ting, Managing Director at Kraken, Europe’s largest cryptocurrency exchange, added that the new visa system, a tax break for business investment and the plan to match venture capital funding are all welcome developments to maintain the UK’s status as a business hub, but that these initiatives do not mean the country should rest on its laurels.

He said: “The government needs to do more to prepare for the future of finance – an eventuality that cryptocurrencies will have a key role to play in. Technology has a habit of moving fast. Look at where cryptocurrencies were a decade ago and where they are now – it’s a daunting – and exciting – prospect to think where we’ll be by 2031. It’s important that the UK does not let this golden opportunity to be at the bleeding edge of innovation pass it by.”

Also announced in the budget was a new limit for contactless payments – the new limit on a single payment will increase from £45 to £100. Matt Phillips, VP, Head of Financial Services at Diebold Nixdorf UK&I, said: “An increase to the contactless payment limit emboldens the industry’s commitment to giving consumers choice over how they pay – whether that be by cash, card, wallet or contactless. This emphasis on choice should be the cornerstone of the industry, ensuring continued access to cash and the option of multiple payment solutions is the priority for all.”

Ricky Lee, CEO and Co-Founder of sync., said that while it will be useful to limit the spread of Covid-19 and speed up queues, but on the other hand, it could lead to an increase in fraud.

“There will always be fraud, and someone always has to cover the cost of criminal transactions. In Europe, banks usually wash their hands when a customer is a victim of fraud. They say it is the user’s fault for not being more careful. I was completely used to this as I grew up in Spain and I was surprised at how forgiving the UK banks were when I moved here. Any fraudster could pretend that their card was stolen and say their last contactless transactions were carried out by a thief to get a refund. But this refund money has to come from somewhere: insurances, banks, or the retailer. I expect that fraud will go up as a result of the higher contactless limit and there will be a knock-on impact for consumers at some point in the near future.”

Agreeing with Lee, Ian Johnson, SVP and Managing Director, Europe at Marqeta, said security risks should not be overlooked. “Physical cards provide very little security, and a fraudster could continue to use their contactless function until they’re cancelled. With fraud in the UK at ‘epidemic levels’ it would be unwise to overlook the advantage this new limit could give to fraudsters. A drive towards the adoption of digital wallets and virtual cards would solve this problem.”

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