GoldSpring Consulting partner Neil Hammond said Brexit
would not affect corporate cards, as the United Kingdom already uses the pound,
as opposed to the EU's euro. Should Scotland leave the United Kingdom to join
the EU and the euro—a distant future possibility, Hammond said there could be
some "very, very minimal" effects.
Likewise, GoldSpring partner Colleen Black said it would
take time to see how the United Kingdom, post separation, will fit into European
Union initiatives like the Payment
Services Directive II, which addresses non-cash crossborder payments. There's
also the 1999 Single
Euro Payments Area initiative, which simplifies crossborder payments among
the 28 member states of the European Union and the four member states of the
European Free Trade Association. "There's really no reason for the U.K.
not to abide by those regulations," Black said.
As for the EU's more recent interchange
fee cap on the amount certain card issuers can charge merchants, she said the
United Kingdom's interchange rates could change once the United Kingdom leaves
and if volatility in exchange rates comes into play. "But we're jumping
the gun," she said, "as we don't even know when all this will take
place, let alone how it's going to move forward."
Expense Execs'
Insights on Broader Issues
Gartner research director Chris Pang said expense systems
already are configured to account for different currencies and exchange rates,
but the chaos around exchange rates will cause the cost of travel for United Kingdom-based
employees to rise in the short term. He added, though, "It may actually
stimulate some short-term travel for other countries if they have interest in
the U.K."
Expensify CEO
David Barrett, whose company opened a European office in London in February to build its U.K. user base,
acknowledged that companies would struggle with long-term effects like visas,
tax issues and regional headquarters, whether in the United Kingdom, within the
EU or both.
Conferma CEO Simon Barker said the referendum result
shocked his banking partners in London. He anticipates that U.K. banks will hold
off on spending until they better understand the situation. "In the
virtual card world, we're looking for them to invest [internally] in new technologies
and infrastructure, and this will postpone it for some time," he said. Still,
the virtual card provider has opportunities elsewhere. Barker expects more demand
from banks in Asia and the United States. Additionally, should the United Kingdom
enter a recession, he said, companies there will focus on processes and
efficiencies. "This is the sweet spot for virtual cards. We're hoping we
will see a lot more motivation to implement them."
Still, just as before the referendum, Hammond
views Brexit as an if, not necessarily a when. He noted that U.K. Prime
Minister David Cameron has announced he will resign in October, prompting a
"second referendum" on EU membership in the form of the election for
Cameron's successor. If, by October, Cameron does not invoke Article 50 of the
Treaty of Lisbon, which lays out a two-year timeline for the United Kingdom to
negotiate terms before its withdrawal becomes official, the next prime minister
also could decline to start the process of separation from the EU.