It’s early days at the Fintech Payments Association of Ireland, (FPAI), but already it is working on unifying a booming, but somewhat fractious, tech sector.
The details of Budget 2016 this month did little to appease anyone in the tech sector in Ireland, bar the major multinationals (MNCs) that make up Dublin’s Silicon Docks who managed to secure OECD approval for the Knowledge Development Box (KDB), securing them a 6.25pc corporate tax rate if they are involved in R&D here.
Meanwhile, start-ups and those looking to get their foot on the ladder saw little in the way of financial incentives from the Government, with minor exceptions being the €550 tax credit for entrepreneurial owners of firms that is still only a third of the overall PAYE tax credit.
In the fintech world, at least, there is some considerable hope, with the launch of the FPAI last month, which is trying to offer focus and stability to a sector that has proven to be one of Ireland’s shining lights in the tech entrepreneurial world.
Ireland’s illustrious fintech alumni
To name just a few of the Irish-led fintech companies that have grown substantially over the last number of years, we have Stripe, Realex Payments, Senddr, Pay With Fire and Fenergo, which have all established themselves as well-known names in the sector.
In fact, a report released by Deloitte last March suggested that the fintech sector could create as many as 5,000 new jobs by the time 2020 rolls around and it was prioritised by the Government in the IFS 2020 strategy.
So what does the FPAI hope to bring to a sector that is considered highly by both the Government and entrepreneurs?
The first discussions to establish the FPAI were started back in early 2015 by a number of stakeholders active in the fintech sector in Ireland, including Maples and Calder and KPMG, as well as a number of high-profile indigenous Irish technology companies, Irish and international financial institutions and interested individuals.
It was then decided that the FPAI would be formed through a merger of the existing non-profit organisation representing the payments industry – Payments Ireland – established by Colm Lyon, founder of Realex Payments; and the Fintech Ireland meet-up group established by the CEO of Senddr, Morgan Lynch.
First stage complete
“I suppose, historically, fintech has been a very fragmented industry in Ireland,” said Lynch, in conversation with Siliconrepublic.com.
“There are a lot of disparate groups working on their own area and I think as part of the IFS 2020 report that was done, it identified fintech as an area of great potential to create jobs.
“If we were to pull various strands of activity together, [we realiased] that a lot more could be achieved and ultimately we would have more jobs created in the country.”
Certainly from the payments perspective, it would appear to be the perfect time to promote the association given the recent statistic that there are 2m contactless payments made in Ireland each month, equivalent to one transaction every second.
And having overcome that first hurdle of setting up, Lynch said that they are now working on the second stage of the FPAI’s development.
“Our initial goal was to form a unified voice for the fintech industry in Ireland and now that we have reached that goal, or we’ve certainly come very close to reaching that goal, we now plan to set out a strategy for developing a fintech ecosystem in Ireland.
“We would like to become the representative trade association for fintech and payments that can be recognised locally and internationally as being a leader in the space.”
Meet-ups critical to grassroots development
Taking the experience that Lynch developed at Fintech Ireland, meet-ups are considered a crucial part of the FPAI’s organisation and, just last week, it held its very first event, a networking meeting with Brett Meyers from CurrencyFair, which Lynch describes as “critical to building that grassroots support amongst the individuals and small businesses who are at the coalface of fintech and payments.”
Of course, there will be challenges in the months and years ahead for the organisation, most notably how fintech and payments companies best navigate the regulatory framework that is emerging in some spaces – crowdfunding being one particular example – that the FPAI says will need to evolve and change at the same time.
Ironically given the topic of crowdfunding being a concern, funding for fintech start-ups will also, no doubt, be on the mind of the 1,000-plus individuals signed up to the FPAI as further research conducted by Deloitte showed that of every €400m invested by venture capital firms, only €16m of that is going to fintech companies.
But looking at the smaller scale, Lynch said it’s about offering specialist advice to start-ups, not just generic one-size-fits-all help to an incredibly diverse sector.
“From the smaller business perspective, it really is about providing specialist supports at different stages of the evolution of those businesses and not treating all start-ups the same,” he said.
“Just as a medtech start-up might need specialist assistance, a fintech would also need specialist expertise and support.”
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