PayPal: Higher fees planned for transactions between UK and EU

Merchants in the UK who use PayPal will have to reckon with a high additional economic burden in the future. The payment service is increasing its transaction costs. The reason here is once again the Brexit.

Additional costs will be passed on to customers

PayPal itself does not increase the transaction costs without reason, of course. Rather, this is a mandatory measure resulting from the Brexit. Since the popular payment service namely has to cope with high costs in payment transactions between the EU and the UK, it cannot avoid this step according to its own data. The price increase became clear when looking at the price overview that the service makes available to its customers. Sellers must therefore expect higher transaction costs from 10.11.2021. Not only the United Kingdom itself is affected. Also the Isle of Man, Gibraltar, Jersey and Guernsey will not get around the higher costs.

1.29 percent of the payment amount

If the dealer document is to be believed, and nothing else is going to change in the plan, the company will start charging transaction fees of 1.29 percent of the payment amount in mid-November. Compared to the previous fee, which was just 0.5 percent, this is a significant increase. Incidentally, if a transaction takes place between the UK and non-EU countries, the fee will be 1.99 percent. That makes the new regulation seem almost like a bargain.

Effects of leaving the EU

The increase in transaction costs is another negative impact that Brexit has brought for the United Kingdom. Unfortunately, small merchants will be the first to suffer from the additional costs. After all, they will not be able to compensate for such an increase in costs with correspondingly high margins or other adjusting screws. The extent to which exporting will then be worthwhile for them at all remains to be seen.