Adyen obtains UK banking license

Dutch payment giant Adyen announced a significant milestone on Thursday as it received approval for a banking license in the United Kingdom, signifying a deeper foray into the financial sector. This strategic move underscores Adyen’s commitment to expanding its financial services offerings.

Adyen’s newly acquired UK banking license paves the way for its merchants to extend cash advances to small and medium-sized enterprises (SMEs) operating in the UK market. This development aligns with Adyen’s mission to provide comprehensive financial solutions to its clients.

Of paramount importance, Adyen highlighted that this license would allow the company to maintain its operations under the UK’s Temporary Permissions Regime, a framework designed to facilitate service provision in line with European Union business standards even after the UK’s exit from the EU (Brexit).

Adyen already holds a banking license in the Netherlands, where it operates as an acquiring bank. This designation empowers the company to expedite merchant payment processing, eliminating the need to rely on banking partners for settlement, a process often burdened with delays lasting several days.

In the UK, Adyen’s merchants already offer an array of financial services, including customer bank accounts, virtual or physical cards, and cash flow and expense management solutions.

Mariëtte Swart, Adyen’s Chief Legal and Compliance Officer, remarked on this milestone, stating, “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.”

Adyen, a prominent competitor to the U.S.-based payments giant Stripe, ranks among Europe’s largest technology companies, boasting a market capitalisation of 23.4 billion euros ($25 billion). The company recently weathered a period of recovery following first-half earnings that revealed the slowest revenue growth on record.

The adverse impact of these earnings became palpable as Adyen’s shares plummeted by as much as 39% on August 17, resulting in a substantial 18 billion euros reduction in the company’s market value. On Thursday, shares of Adyen closed down more than 2% on the Amsterdam stock exchange, reflecting ongoing market dynamics.

Adyen’s successful permit acquisition unfolds against the backdrop of a contrasting narrative for one of the UK’s leading fintech companies, Revolut, which has grappled with challenges in securing a banking license from the Bank of England. Revolut initiated its license application two years ago but has faced persistent delays. Regulators have cited various concerns, including the company’s tardiness in filing financial accounts and internal corporate culture issues.

Revolut, in response, has undertaken measures to enhance its corporate culture internally. Additionally, the company witnessed a change in leadership, with its Chief Financial Officer, who presided during the time of the delayed financial accounts, departing earlier this year. These efforts underscore the challenges faced by fintech firms in navigating regulatory complexities in their quest for expanded financial service offerings.