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The majority of fintech start-ups in the UK have been campaigning for the remain side of the EU referendum. 200 representatives of 53 tech businesses signed a letter last month explaining what the risk Brexit would mean for a sector that, according to a KPMG report “London’s fintech sector and the European Union”, is worth £69bn: trading restrictions, difficulties in hiring talent, and slower economic growth.

The uncertainty surrounding the referendum’s outcome has already had a negative impact on the UK’s payment, lending and investing activities, with many deals held on stand-by mode until the referendum result is known. A slowdown in economic growth for the first quarter of 2016 confirmed a decrease in economic activity, affecting the fintech sector too. “Major prospective clients are delaying the decision about becoming their customers, pending the outcome of the referendum,” says Ben Brabyn, head of Level 39, an organisation counting a member base of over 200 fintech start-up, based in Canary Wharf in London.

What’s causing the turbulence at the moment is not the actual impact, but the perceived risk. Mike Laven, Currencycloud

The fintech experts and entrepreneurs to whom GTR spoke highlighted issues of migration, regulation and relocation as top concerns on their minds. “What’s causing the turbulence at the moment is not the actual impact, but the perceived risk, the fear that companies and investors will leave,” explains Mike Laven, CEO at Currencycloud, the payment platform underpinning the cross-border transactions of most payment services, such as Transferwise.

Laven tells GTR that his company would not leave the British capital in the event of Brexit, as the city’s time zone, financial history and FX expertise wouldn’t vanish: “It’s important that Currencycloud keeps its strong ties with London, the unchallenged global centre of operational and strategic expertise for foreign exchange. I simply can’t see a quick replacement for London as Europe’s financial capital.”

[In the event of Brexit], we would be able to keep working in the UK, however it’s a question of whether we would want to. Marta Krupinska, Azimo

Other dimensions already affected by the referendum uncertainty include capital purchases and system migration decisions, as well as volatility in the FX market, which has a major influence on all fintechs operating in the payment space. “We expect the FX market to be extremely volatile around the time of the vote, which can affect us commercially. [In the event of Brexit], we would be able to keep working in the UK, however it’s a question of whether we would want to,” says Marta Krupinska, co-founder and general manager at Azimo, a start-up managing cross-border payments, specialising on remittances. As such, the company has focused on another issue hotly debated in the referendum campaign: the perception of migrants and migration. “We believe the world needs less borders, not more borders, and if Vote Leave wins it will become questionable if this is the right place to be growing our business in.”

Azimo even commissioned a report on the perception of migration in the UK, seeking to demystify a number of assumptions and prejudices about migrants. “Fear and scaremongering about migrants are causing real problems in our society. We need to welcome these people and value the skills they bring – if we don’t, it’ll hit Britain’s economy by limiting the number of skilled migrants growing and starting their own businesses in the UK,” she tells GTR.

If the UK is to continue to lead the world in fintech the loss of sovereignty is quite frankly a liability. Chris Gledhill, Secco Bank

In fact, start-ups do not only look to migrants as their customers, but as their employees, too. Restrictions on migration ensuing a Brexit vote concerns Currencycloud’s Laven: “London’s position as a global and financial hub is a major draw for digital and tech-focused talent. Anything that threatens this poses a potential threat to the vibrancy of the London fintech scene and has the potential to make developing the business of Currencycloud and our clients more difficult.”

Even those within the fintech sector who have made up their minds to support the Leave side see value in ensuring the sector can still access the international talent it needs to thrive. “Immigration is good,” writes Chris Gledhill, former technologist at Lloyds and currently CEO and co-founder of Secco Bank (an early stage digital bank in the process of applying for a UK banking licence), in a post penned on LinkedIn and quoted here with his permission. “As far as fintech/banking is concerned, I suggest we immediately identify key talents/skills we need in the UK and put measures in place to fast-track entry.” According to him, the freedom from EU regulations that the UK would gain from leaving should also be used to “court the world’s large enterprises and start-ups” to open headquarters in the country.

Without access to the single market, however, international companies regulated in the UK would have difficulties operating in the European Economic Area. Under current agreements, businesses receiving a licence from UK regulators can provide their services throughout the whole single market without having to apply for new licences thanks to a cross-border arrangement known as “passporting.”

In the payment industry, Europe achieved the critical mass needed to create new players that can compete with American or Chinese giants. Do we want to lose the battle of the mobile wallet that just started? Damien Guermonprez, Lemon Way

If the UK was to exit the single market, this arrangement would arguably no longer be in place. Gledhill, like others on the Leave side, sees in Brexit the opportunity for the UK to rewrite its own rules and regulations, picking and choosing between the ones suggested by EU rules and regulations rather than accepting them prepackaged by the European institutions. “The fact of the matter is that it is no longer the UK parliament that gets to make the rules. If the UK is to continue to lead the world in fintech the loss of sovereignty is quite frankly a liability.”

Still, unless a different agreement was sealed, businesses would have to apply for a licence in another EU member country to benefit from passporting, which would take some time. This could cost the UK its current leadership position in the fintech space, to the advantage of European hubs.

As part of their Brexit plan, Currencycloud has ensured it would not be affected by the lost of passporting privileges, as the company is regulated in every European country in which it operates. “In the event that a Brexit is confirmed on June 23rd, and FCA regulation no longer provides that ability to license in one state and passport to others, Currencycloud will be prepared and ready to do what’s best for its clients and company growth,” Laven tells GTR.

But other businesses which do not find themselves in such a situation may lose out to competitors operating from within the EU. “Brexit would have a short-term positive impact on our business, since we would become a gateway to continental Europe for more clients currently served by UK-based competitors,” says Damien Guermonprez, CEO of Lemon Way, a French payment start-up that recently opened an office in London.

Despite the possible benefits to his own business, Guermonprez is a firm supporter of the Remain side. “We are convinced that the UK leadership in our business is positive for all Europeans in the long term. We know that the size of a market matters. In the payment industry, Europe achieved the critical mass needed to create new players that can compete with American or Chinese giants. Do we want to lose the battle of the mobile wallet that just started?”

Altogether, considering that adaptability and flexibility are key characteristics of the start-up mentality, fintechs would be better placed than incumbents to face the consequences of a possible Brexit – although this would still not be an ideal position. “We are fortunate to work with some extremely agile companies,” says Level 39’s Brabyn. “Some of these would be well placed to adapt, but that would be a mitigation to the damage of Brexit rather than creating a new opportunity.”