BKL’s fintech partner Jon Wedge has contributed to a Bloomberg News article on alleged financial wrongdoing among the 200+ electronic money institutions (EMIs) licensed in the UK.
‘EMIs offer payments services such as processing transactions, prepaid cards, overseas remittances and digital wallets. But they often serve high-risk clients who traditional lenders would refuse to deal with, such as those trading cryptocurrencies, said Jon Wedge, a partner at London accounting firm Berg Kaprow Lewis LLP.
“These guys can’t get banking services,” said Wedge, who works with payments businesses. “What they [EMIs] do now is they fill a gap in the market that’s not filled by high street banks or main acquiring banks.”
Money laundering already costs the UK more than 100 billion pounds a year, according to government estimates, and the proliferation of EMIs without tighter regulation could worsen London’s reputation as a dirty-money hub, Wedge and others say.’
The article is available here on the Bloomberg website.
Jon adds:
‘I’m in agreement with the sentiments of Graham Barrow and Jane Jee. As the payment volumes and value of flows passing through EMIs increase under innovative business models, evolution of the EMI regulations by the Financial Conduct Authority will be required.
The tricky bit will be getting the balance right between introducing appropriate tighter regulation without stifling innovation and growth in the UK’s fintech sector.’
Our 2021 report on the Future of EMIs is available here. You can watch our related panel discussion below.
