Neopay Practical Guides #1 Brexit (Just how much trouble are we in?)

Overview (how we ended up in this mess) April 2015 Conservative Party issued their election manifesto which promises a UK wide referendum on the UK’s membership of the EU May 2015 Conservatives win election with a margin of 12 seats Feb 2016 Referendum date announced June 2016 UK votes by a margin of 2% to leave the EU June 2016 David Cameron resigns as Prime Minister

Overview (how we ended up in this mess) July 2016 - Theresa May elected by Conservative MP’s as new Party Leader and therefore automatically becomes Prime Minister March 2017 - UK Government triggers Article 50 April 2017 - Theresa May announced surprise General Election June 2017 - Election date March 2019 - UK scheduled to leave the EU

What Happens Next (how this mess gets messier) Negotiations due to start shortly after the election on June 8th Election was called by Theresa May to: Increase the Conservative majority Strengthen her control over Parliament Strengthen her negotiating position with the EU Reconfirm the countries commitment to Brexit Now these are all good tactics, assuming that the Conservatives have got their assumptions correct. However…………………………………………

What Happens Next (how this mess gets messier) Prior to calling the election, Conservatives had a narrow majority but were high in opinion polls Labour continued to suffer turmoil and fighting in its own ranks Opinion polls showed Conservatives had 48% support and Labour just 24% Fast forward to today……………………..

What Happens Next (how this mess gets messier) Latest polls show the Conservative lead narrowed to just 3% Theresa May refused to appear in a live TV debate Conservatives forced to abandon one of their major manifesto points within days of its announcement following huge public backlash Conservative MP and two of his aides charged with election expense fraud in the 2015 election – the seat contested by Nigel Farage This follows the fine received by the Conservative Party in 2016 for National campaigning “accounting errors” in the 2015 election and their insistence that no such “errors” occurred at a local level

What does this mean for my business (how do I get out of this mess) Key Question 1: Will the UK leave the EU?

What does this mean for my business (how do I get out of this mess) Key Question 2: Will the UK leave the Single Market?

What does this mean for my business (how do I get out of this mess) Answer 1: Yes Answer 2: Maybe...

What does this mean for my business (how do I get out of this mess) Answer 1 is to all intents and purposes irrelevant unless you are a British citizen What really affects business for all of us is answer 2 So the real issue we must face is what happens if the UK leaves the Single Market? The key question becomes: How does a UK firm access the EU and how does an EU firm access the UK and do we need to?

What does this mean for my business (how do I get out of this mess) There are really only two relevant possible outcomes to Brexit for business purposes: The UK remains in the Single Market and firms can still passport freely cross border or: The UK leaves the Single Market and firms can no longer passport Obviously outcome 1 maintains the status quo and business continues largely as normal Outcome 2 is by no means the end of the world it simply raises another key question that in truth, many firms do not address, specifically: Just what percentage of my business (or projected business) comes from the UK?

What does this mean for my business (how do I get out of this mess) The UK is the second largest economy in Europe after Germany at roughly 17% with Germany sitting at 20% and France third at 14% In respect of financial services, London has been ranked as the number 1 financial centre worldwide since 2007 No other EU location features in the top 10 It is likely then, that the majority of payment providers will still wish access to the UK market but less likely that UK providers will wish to access the EU market If your business model does not require access to, or can sustain profitability without, UK consumers then it makes sense to establish in mainland Europe only If your business does require access to both markets then you will need to hold two licences, one in the UK and another in mainland Europe

Questions?

Craig James – Chief Executive Officer Neopay Ltd W: www.neopay.co.uk E: craigjames@neopay.co.uk T: +44(0)207 404 4744 D: +44(0)7515 419 009 Neopay US W: www.neopay.us E: info@neopay.us T: +1-424-284-4068 F: +1-424-284-4001 www.neopay.co.uk info@neopay.co.uk © Neopay Ltd 2016