Many smaller UK businesses feel confident that they will be able to overcome the challenges that Brexit throws up in 2021, with many expecting to bounce back from an initial downturn and thrive.
Conversely, many EU firms felt unprepared, but were also confident that things would turn out ok.
The study, by Mollie, one of the fastest-growing payment service providers, reveals the differences between small-mid-sized UK merchants versus their counterparts in the EU and the opportunities and challenges that are expected come December 31st.
The data paints a positive picture for British firms who expect to face challenges when the UK formally leaves the EU, but are optimistic about their ability to adapt. Conversely, EU firms felt unprepared but confident in their current strategy and believe Brexit is unlikely to bring any new problems.
Both UK and EU businesses said that Brexit has resulted in a shift towards domestic activity rather than international commerce.
So what did it find?
Some of the key findings of the study – which was carried out while negotiations between the UK and EU were still on-going, found the following:
Despite headwinds, British SMEs are standing strong
- 42% of UK merchants and 32% of EU firms expect to overcome any Brexit-related challenges by the end of 2021.
- UK businesses feel they have adapted fairly well, rating themselves 3.3/5 when asked about their progress in addressing new challenges. EU businesses were slightly less optimistic rating themselves 2.9/5 for the same question.
- And 69% of UK merchants said that they will be ready for Brexit on or before Dec 31st.
A more regional and personalised approach will help SMEs bounce back
- Finally, British merchants are more optimistic than EU merchants with 22% saying that Brexit encourages them to focus on most profitable channels like e-commerce or technology-focused retail, versus 11% for EU retailers.
- 18% of UK firms also said relaxed regulation makes it easier to operate and 16% said it encourages a local and specialised approach that provides customers with a greater degree of personalisation.
EU merchants have been unable to plan but anticipate few new challenges
- Although more than a third (36%) of EU merchants admitted they had been unable to plan for Brexit, almost the same proportion (34%) said there will be no new challenges for them once the UK leaves the European Union.
- In fact, one in five (21%) EU firms expect to face no impact at all from Brexit and 43% said their strategy has remained unchanged.
“Brexit has been looming in the background for the last four years and has been expected to hit businesses hard,” says Ken Serdons, Chief Commercial Officer at Mollie. “Yet, small to mid-sized merchants are feeling confident and prepared to tackle Brexit head-on. With our focus on simplifying financial services and creating localised payment experiences, Mollie is well poised to help customers navigate this shift and continue to grow internationally. In particular, merchants with a growth mindset – who believe that their capabilities can be developed through dedication and hard work – will bounce back most successfully.”
