Financial services platform Mollie is urging cross-border merchants to adopt a ‘gold standard’ compliance strategy to navigate the widening gap between UK and EU fintech regulations.
As the EU moves toward the prescriptive requirements of PSD3 and the Payment Services Regulation (PSR), the UK continues to pivot toward the outcomes-based supervision of the Financial Conduct Authority (FCA) Consumer Duty. This regulatory split threatens to force businesses into a ‘double stack reality,’ where they must maintain separate operational and technical infrastructures to satisfy both jurisdictions.
Dave Smallwood, managing director of Mollie UK & Ireland, explained that the worst-case scenario for scaling merchants involves significant tech debt and wasted resources from duplicating compliance efforts.
“This self-inflicted complexity caps growth by trapping a company’s best talent in operational drag instead of driving the business forward,” Smallwood added.
To counter this, Smallwood recommends a strategy where merchants build to the UK’s higher ‘good outcomes’ bar as a company-wide default. Rather than stifling user experience through over-compliance, this approach creates a single, superior technical stack that generally covers EU baselines automatically.
The call for structural efficiency comes as European payment rails undergo their own transformation. The launch of Wero, the pan-European payment method intended to replace local champions like iDEAL, is often viewed by UK merchants as a mainland concern. However, Smallwood argued that viewing Wero as just a local payment method is a mistake.
“It’s a fundamental shift in key growth markets,”Smallwood commented, noting that the migration introduces new operational complexities, such as dispute mechanisms for previously guaranteed bank payments.
Mollie is also addressing the administrative burden of cross-border growth through its planned acquisition of GoCardless, which remains pending regulatory review. While the two companies currently operate independently, the combined platform aims to integrate bank-to-bank payment expertise to help merchants ‘orchestrate away’ reconciliation chaos.
According to Smallwood, the real risk for modern merchants is not vendor lock-in, but the data fragmentation caused by a multi-vendor strategy. He cited client Otrium, which used a unified data layer to remove underperforming payment methods and add others, like Klarna, to drive growth.
“This visibility provides the flexibility merchants need,” Smallwood said, explaining that consolidation actually increases commercial leverage by providing the intelligence needed to make providers compete for business.
Looking toward 2026, Mollie identifies expanding liability for fraud as the next major friction point for European fintechs. As the responsibility for reimbursing victims of scams moves toward payment service providers and merchants, the company is preparing its 250,000+ clients with adaptive AI.
By replacing static rulebooks with systems that understand transaction context and intent, Mollie aims to build a ‘Dynamic Trust Score’ that approves legitimate customers while blocking complex threats in real-time.
