Any rise in payment-platform fees is unwelcome news
PayPal raises fees between UK and European businesses: reason unveiled. Source: shutterstock.com
According to Ecommerce News, PayPal will raise the fees for payments between businesses in the UK and those in Europe.
The reason for this price increase is Brexit since with the UK no longer being part of the EEA, PayPal’s costs are higher than usual.
The European Economic Area consists of all countries from the EU, 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% fee. This rate stayed the same, until now. Starting November, the fee will go up to 1.29%. It’s, however, still lower than PayPal’s standard 1.99% for the rest of the world.
Meanwhile, PayPal isn’t alone in this because Visa and Mastercard also announced they will fivefold the credit card and debit card fees from mid-October.
Besides, the Federation of Small Businesses stated that any rise in payment-platform fees is unwelcome news for small businesses and entrepreneurs.
In fact, since the start of 2021, around 1 in 4 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% of small exporters said the value of their exports had dropped over the last 3 months.
We’ve reported that PayPal announced the acquisition of Paidy, a two-sided payments platform and provider of buy now, pay later solutions in Japan, for approximately $2.7 billion.
The acquisition will expand PayPal’s capabilities, distribution and relevance in the domestic payments market in Japan, complementing the company’s existing cross-border e-commerce business in the country.
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