Ireland has experienced significant growth in its fintech and payments sector in recent years, both in regulated and non-regulated activities. Ireland has been home to significant operations for many of the world’s largest and leading financial institutions since the establishment of the IFSC (Irish Financial Services Centre) in Dublin in the mid-1980s, the multinational financial services sector in Ireland is now directly employing over 40,000 people in more than 400 companies across Ireland.

The impact of Brexit has led many other financial services firms, including a large cohort of UK headquartered companies, to establish their EU/EMEA headquarters in Ireland in more recent years. The rationale for this is for several reasons; Ireland is uniquely positioned as the only English-speaking nation in the EU, Ireland is a common law jurisdiction, there is a pro-business and friendly business environment, a pro-business Government supporting Ireland’s investment agencies IDA Ireland and Enterprise Ireland, the presence of a well-educated workforce, visible collaboration between industry and academia and importantly as Ireland is one of few hubs in Europe where Big Tech and large scale financial services can be visibly seen.

This influx goes hand-in-hand with the country’s ever-increasing number of financial institutions that have set up operations in Ireland over the past four decades, from major international banks such as Barclays, HSBC, and Deutsche Bank, to investment managers including BNY Mellon and Vanguard to insurers and reinsurers including AXA, Alliance and MunichRe. The roster in Ireland goes on to include 17 of the top 20 global banks, some of the world’s biggest technology companies such as Google, Meta, Microsoft, and AWS and 11 of the world’s 15 largest insurance companies. Supporting them is an expansive ecosystem of companies providing essential services such as technology support, software development and cybersecurity, anti-money laundering and investor relations services.

With thriving financial and technology communities in Ireland, it is easy to understand how a vibrant Fintech and payments sector began to emerge and expand in more recent years and why Ireland has become a location of choice for these companies.

Today, specific sub-sectors are even building out their own communities, including online payments and processing, cross-border payments, payment gateways, digital banking and digital remittances, open banking, regtech, blockchain and digital assets. For instance, in August 2022 Zodia Custody (Ireland)—a subsidiary of Standard Chartered Bank—became the first dedicated crypto asset custodian registered in Ireland.

The impact of Brexit

Following the UK’s departure from the EU, numerous UK-based financial services companies sought to establish operations within the EU to continue to operate in this market. Ireland emerged as a favoured destination for these companies for many reasons; a talented and highly skilled workforce, Ireland was and continues to be an attractive location for candidates looking to relocate to another country for employment opportunities, the presence of robust financial services and technology sectors, and a pro-business Government supportive of foreign direct investment.

Many of the fintech and payments firms who established such hubs in Ireland sought regulatory authorisation, predominantly as Electronic Money Institutions (EMI) and Payments Institutions (PI). To date, there are 23 PI firms and 21 EMI firms authorised and regulated by the Central Bank of Ireland (CBI), many of whom are UK headquartered firms such as Paysafe, TrueLayer, Corpay, myPOS, and Paysend.

MiFID authorisations have also been sought in Ireland by fintech and payments companies, and more recently, VASP registrations (Virtual Asset Service Provider), are being sought by some financial services companies to facilitate the exchange of virtual assets. Firms holding VASP registrations in Ireland include UK headquartered Paysafe and Zodia Custody and US headquartered firms, Coinbase and Gemini.

Initially, companies who sought regulatory authorisation in Ireland focused on managing regulatory functions and front office activities for their EU business. However, due to the exceptional talent pool, performance of the operations, quality of work, scalability, and favourable business environment, many companies have expanded their operations in Ireland to include functions such as operations, technology development, software engineering, software development, RD&I, and technical support functions.

With the long-term impacts of Brexit yet to be seen, Ireland continues to attract interest from companies with existing operations in the country seeking to broaden their mandates.

Where academia and industry meet

A noteworthy aspect of Ireland’s Fintech and payments space is the strong collaboration between academia and industry which has helped develop specialised qualifications that cater to the growing needs of the financial services sector.

The global Fintech-as-a-Service Market size is expected to reach $681.6 billion by 2028 and the ICTSkillnet Report 2022 reported a huge market need for graduates with skills in finance and financial technologies in Ireland. Leading incumbents, financial institutions, and emerging Fintech and payments entrants actively engage with universities, third-level institutes, and research centres to produce these courses to help produce world-class graduates ready for the market needs.

Examples of this include the MSc in Fintech provided by the National College of Ireland and the BSc/MSc Immersive Software Engineering provided by University of Limerick – a course established in collaboration with Stripe founders, John and Patrick Collinson. This close cooperation ensures that the industry remains aligned with the latest technological advancements, regulatory requirements, and industry trends, further bolstering Ireland's reputation as a hub for innovation and expertise.

A collaborative ecosystem

Ireland's appeal as a location for financial services firms looking to expand and internationalise their businesses, is underpinned by the scale and maturity of its industry. There are about 60FDI related companies operating in the fintech space in Ireland, with these companies employing around 7,000 employees across a wide range of activities including finance, risk, compliance, KYC, AML, cyber, software development, RD&I, platform development, and technical support.

Many of these companies have also chosen to locate global leadership functions in Ireland as a result of the continued success of operations there, all of which has helped further drive and grow the significance of activity carried out in Ireland at a global level.

IDA Ireland works closely with these companies, supporting ambitions for growth and innovation and helping to demonstrate the ability to scale operations in Ireland to support global functions and drive scale from Ireland.

Engagement within the fintech and payments industry in Ireland is strong with leading stakeholders including IDA Ireland, Enterprise Ireland, the Fintech & Payments Association of Ireland (FPAI), and other significant bodies all working towards common goals as set out in the ‘Ireland for Finance 2025 Strategy’ delivered by Government, which highlights the importance of financial services to the Irish economy and significant role Fintech and Digital Finance have in achieving the ambitions as set out in this strategy.

Other broader examples of collaboration with industry in Ireland include the Citi Accelerator Hub, which is a co-working space for fintech start-ups located in Citi's offices in the Financial District in Dublin. Participating startups have access to Citi’s mentoring network for advice and support, as well as industry meetups and networking events.

Another example is the Digital Hub, a tech incubator that works with close to 1,000 entrepreneurs and 40 early-stage companies each year. Some of its notable alumni are household names, such as Kavaleer, Lincor, MTT, Slack, and Stripe.

A bright future

Ireland’s proven track record and capability as an EU/EMEA headquarters offers access to a wider European market. This advantage, coupled with Ireland as the only English-speaking country in the EU and Ireland’s reputation for excellence in financial services and technology, acts as a magnet for companies seeking growth and internationalisation opportunities. This is evident by the number of companies who have chosen Ireland as a location of choice for these activities, companies such as R3, Remitly, S&P Global, Revolut, MoneyCorp, WorkFusion, and Boku.

Despite the challenges posed by Brexit which resulted in many companies needing to establish EU/EMEA hubs in an EU jurisdiction, companies who have done so in Ireland have been successful and have found Ireland a pro-business and friendly jurisdiction open to new and exciting opportunities, all of which have helped make this transition more seamless and helped with the integration of these news hubs into their overall businesses.

The similarities in business and law between the UK and Ireland have facilitated this transition, ensuring continuity and minimal disruption. As the fintech and payments sector continues to thrive and evolve, Ireland's position as a global hub remains secure.