Mollie Advocates for Enhanced Compliance Strategies Amid Diverging Regulatory Landscapes
The financial services platform Mollie is encouraging cross-border merchants to adopt a compliance strategy that meets a ‘gold standard’ amid the growing disparities between UK and EU fintech regulations. As the European Union moves toward the explicit requirements set by the Payment Services Directive 3 (PSD3) and the Payment Services Regulation (PSR), the UK is shifting its focus towards an outcomes-based supervisory framework through the Financial Conduct Authority’s (FCA) Consumer Duty.
This significant regulatory divergence could result in a ‘double stack reality’ for businesses, forcing them to develop separate operational and technical infrastructures to meet the distinct regulatory demands of both regions. Dave Smallwood, Managing Director of Mollie UK & Ireland, highlighted that for scaling merchants, this scenario could lead to excessive technology debt and a misallocation of resources due to duplicated compliance efforts.
Smallwood expressed concern that such self-inflicted complexity can stifle growth by tying up a company’s best talent in operational burdens rather than allowing them to focus on driving the business forward. He proposes that merchants should aim to meet the UK’s higher ‘good outcomes’ standards as a default company-wide practice. This strategy not only avoids hampering user experience through over-compliance but also facilitates the creation of a robust technical infrastructure that inherently meets EU compliance baselines.
The urgency for structural efficiency is underscored by significant changes in European payments infrastructure. The introduction of Wero, a pan-European payment method designed to replace local champions such as iDEAL, is often regarded by UK merchants as primarily a mainland issue. However, Smallwood emphasizes that regarding Wero merely as a regional payment method is a miscalculation, noting it represents a fundamental shift in key growth markets.
He pointed out that this transition brings about new operational complexities, including the need for updated dispute mechanisms for bank payments that were previously guaranteed. Additionally, Mollie is tackling the administrative challenges associated with cross-border growth through its planned acquisition of GoCardless, which is currently subject to regulatory review. The collaboration aims to merge bank-to-bank payment expertise to help merchants reduce the chaos associated with reconciliation processes.
According to Smallwood, the pressing concern for modern merchants lies not in vendor lock-in but rather in the data fragmentation that arises from employing a multi-vendor strategy. He cited Otrium, a client that utilized a unified data layer to identify underperforming payment methods while incorporating others like Klarna to stimulate growth. This level of visibility empowers merchants with the flexibility necessary for informed decision-making.
As Mollie looks forward to 2026, it identifies the increasing liability for fraud as a significant friction point for European fintech companies. With the responsibility for reimbursing victims of scams shifting towards payment service providers and merchants, Mollie is proactively preparing its 250,000+ clients with adaptive AI solutions. By transitioning from static rulebooks to dynamic systems capable of contextualizing transaction intent, Mollie aims to establish a ‘Dynamic Trust Score’ that effectively differentiates legitimate customers from complex threats in real time.