Every Wednesday, we delve into the latest fintech updates from across the UK. This week brings updates from Remarkable Commerce, British Business Bank, Global Payments, Klarna, Atom Bank and Revolut.
UK business’ plea to the government for support
A panel of leading e-commerce and payments experts has called for the UK government to do more to help British businesses. The plea has been issued as a result of the cost of living continuing to impact consumer spending.
Brad Houldsworth, head of product at Remarkable Commerce, called for the government to appoint a retail minister. Houldsworth spoke during an online session hosted by Mike Chambers, a consultant at Access PaySuite.
Brad explained the issue, highlighting the positive impact technology can have in finding a solution. He said: “We’re speaking to retailers on a daily basis about the importance of being able to offer convenience and a great customer experience. However, we know that achieving this is a careful balancing act, with profit margins extremely tight. As many found during the pandemic, legacy technology will make this an all the more difficult task.”
Seed-stage investment rises outside of London, despite a fall in the capital
The use of external finance has fallen across the UK by seven per cent, according to a report from the British Business Bank.
Thirty-eight per cent of smaller businesses used external finance in the second quarter of 2022, a fall from 45 per cent a year earlier. Meanwhile, seed-stage equity investment grew by 88 per cent outside of London. Despite this significant rise, seed-stage equity investment fell by 22 per cent.
Shanika Amarasekara, chief impact officer at British Business Bank, gave her view on the report’s findings. She said: “We are seeing promising signs of growth in equity finance markets outside of London and data suggests equity investment in the UK held up in the first half of the year. While equity investment slowed in recent months, it is encouraging that net zero-related investments appear to be growing.
Gen Z could cause payment innovation
Twenty-six per cent of consumers abandoned an online purchase between December 2021 and July 2022 because the merchant did not offer their desired form of payment, according to research from payment technology provider Global Payments.
Gen Z respondents are the most likely age group to have direct bank transfers as their preferred payment method, indicating a likely shift in how consumers will pay in the future.
Nick Corrigan, UK and Ireland managing director and president at Global Payments, explained what the findings could mean. He commented: “Adoption at scale of new payment options usually reaches a tipping point when consumers demand innovation or merchants encourage adoption.
“I believe we are at an inflection point with open banking, where we are seeing interest from both consumers and merchants in taking advantage of new innovations in payments. With bank payment, merchants have an opportunity to reduce both their fees and the risk of fraudulent chargebacks.”
Christmas shopping to rise on Black Friday
As Black Friday looms for another year, Klarna finds that consumers plan to purchase more gifts for the holidays during the sales.
According to a Klarna consumer poll, 73 per cent of consumers will try to buy a larger share of holiday gift purchases during the Black Friday and Cyber Monday sales. The poll also found that 52 per cent are to only buy what they can afford in the sales.
Only 13 per cent of consumers believed they “will probably end up spending too much”. The results suggest that people are planning ahead for Christmas in an effort to save money during the cost of living crisis.
Atom Bank re-issue mortgage products after withdrawals
UK and app-based Atom Bank has re-introduced a number of ‘Near Prime’ and ‘Prime’ mortgage products with competitive rates.
Following a temporary withdrawal from the market at the end of September, alongside a number of mortgage offerings across UK banks, two and five-year term products up to 85 per cent LTV can now be accessed again.
Richard Harrison, head of mortgages at Atom bank, explained the decision. He said: “We’re excited to be expanding our range of products by launching competitive Prime and Near Prime mortgage products across a broad range of LTV’s.
“The average house price has increased by nearly £50,000 over the last two years which, alongside increasing household costs, means it’s a challenging time to be buying a home. Our award-winning range caters for a broad range of borrowers, helping those looking to remortgage and reduce costs as well as people, some of whom may have less than perfect credit, on the journey to making homeownership a reality.”
Revolut celebrates 25 million retail customers
Revolut has surpassed 25 million retail customers worldwide and now processes over 330 million transactions a month. After hitting the milestone, it plans to launch in Brazil, India and New Zealand.
In an effort to continue global expansion, Revolut has increased its presence in the US over the last year. It now employs over 150 people in North America, serving over half a million retail customers.
André Silva, head of international expansion, commented: “Our mission is to unlock the power of a borderless economy, for everyone, by bringing the world’s first financial super app to all corners of the globe. This year we have made important steps in achieving this, building our teams on the ground in India, Mexico and Brazil.”