British businesses will be charged a 1.29% fee for payments from the European Economic Area and vice versa.Most currently pay about 0.5% in similar charges, which have remained unchanged since before the UK left the EU customs union and single market.PayPal said it was now incurring extra costs, such as the rise in interchange fees between the UK and EEA.European rules capping credit and debit card interchange fees at 0.2% and 0.3% no longer apply to UK businesses.And both Visa and Mastercard have announced they will raise them fivefold from mid-October.
Most businesses will see their current 0.5% fee raised to 1.29% – still lower than PayPal’s standard 1.99% for the rest of the world – but some of those with their own customized agreements with PayPal will have their existing rate raised by 1.29%.The Federation of Small Businesses (FSB) said any rise in payment-platform fees “is unwelcome news for small businesses and entrepreneurs.Since the start of the year, around one in four small exporters have stopped exporting to the EU, citing amongst other reasons the costs involved in selling to EU-based customers.
And over the past three months, a little over 40% of small exporters said the value of their exports had dropped. Vice-chairman Martin McTaguealso saidthat they need to see stronger support for small exporters from the government, including a relaunched SME support Fund and a reformed Tradeshow Access Program.
