Third of businesses lost £60k from cross-border payments post-Brexit

More than one in three UK businesses (37 per cent) have lost revenue from cross-border card payments post-Brexit, according to new research.

The analysis by payment service provider ECOMMPAY based on surveys of 1,002 UK consumers and 500 business leaders in the UK, in collaboration with Censuswide found that average revenue lost from cross-border card payments post-Brexit is £66,812.

Just under one in five (18 per cent) of businesses lost between £10,000 and £50,000, while 11 per cent lost between £50,000 and £1 million, according to the research.

The losses follow in the wake of changing regulations post-Brexit, with certain payment processes becoming more expensive.

More London businesses have lost money from cross-border payments post-Brexit than those in regional areas, with 51 per cent of business in the capital affected, compared to only a quarter (25 per cent) of those in the East of England, 19 per cent in the North East, and 13 per cent of Welsh companies.

Larger businesses have been more significantly impacted, with only 14 per cent of companies with less than nine workers affected, next to almost half (47 per cent) of those with more than 250 employees.

The UK is no longer covered by EU regulation limiting interchange fees, which has led to some card acquirers increasing fees that EU merchants must pay when receiving orders from the UK.

UK-based payment providers have also lost their automatic EU passporting rights, meaning they cannot provide services in EU member states without confirming they are compliant under new regulations.

With Brexit complicating certain payment services, almost a third of businesses say that complex regulation is the biggest barrier to free trade with the EU at present.

The next largest issues that UK businesses cite regarding free trade are border control issues (24 per cent), lack of clarity around law changes (22 per cent) and lack of local European knowledge (16 per cent).

Brexit is also dissuading UK businesses from scaling, the report found, with 17 per cent of businesses currently see Brexit issues as the biggest barrier for overseas expansion.

The report also found that UK businesses are struggling with the new circumstances of Brexit, with more than a quarter (26 per cent) admitting they are not clear on how best to reach EU customers to facilitate payments.

One on five (20 per cent) business leaders do not feel their company has adequate payment processes to adapt to rapid changes in consumer habits, suggesting many businesses could struggle with the post-Brexit shift.

Commenting on the findings, Paul Marcantonio, executive director UK & Western Europe at ECOMMPAY, said: “The last 12 months have had far-reaching implications for the UK, and businesses are having to grapple with dramatic shifts in consumer behaviour as well as the fallout from Brexit.

“With Brexit complicating certain payment methods, businesses will need to be aware of the implications of regulatory change on payments and put in place strategies to ensure they are able to reach both UK and EU customers effectively.

"Whether that’s via alternative payment methods, exploring Open Banking opportunities or employing expert support from payment providers like ECOMMPAY that can help business leaders find the best possible solutions for cross-border trade.”

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