PayPal raises fees between UK and Europe
PayPal will raise the fees for payments between businesses in the United Kingdom and those in Europe. The reason for this price increase is Brexit. With the UK no longer being part of the European Economic Area, PayPal’s costs are higher than usual.
The European Economic Area consists of all countries from the European Union, Iceland, Liechtenstein and Norway. Prior to the Brexit, the United Kingdom was, because it belonged to the EU, also part of this.
Most entrepreneurs and businesses from these countries pay a 0.5 percent fee. This rate stayed the same, until now. Starting November, the fee will go up to 1.29 percent. It’s, however, still lower than PayPal’s standard 1.99 percent for the rest of the world.
PayPal isn’t alone in this. Visa and Mastercard also announced they will fivefold the credit card and debit card fees from mid-October.
Simplifying cross-border fees
The payments company told BBC this is a way to simplify its cross-border fees. “In a highly competitive market, this will make it easier for these businesses to compare PayPal’s pricing with that of other providers and to better appreciate the value we provide.”
Any rise in payment-platform fees is unwelcome news.
The Federation of Small Businesses says that 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 more than 40 percent of small exporters said the value of their exports had dropped over the last three months.