37 percent of UK-based businesses lost over GBP 60,000 from cross-border payments post-Brexit

According to the press release, the data reveals the average revenue lost from cross-border card payments post-Brexit is GBP 66,812. Just under one in five (18%) of businesses lost between GBP 10,000 and GBP 50,000, while 11% lost between GBP 50,000 and GBP 1 million. The losses follow in the wake of changing regulations post-Brexit, with certain payment processes becoming more expensive.

The research comes as ECOMMPAY launches its new whitepaper, ‘The future of payments post-Brexit: what to consider to move with the times’, which considers the impact of Brexit and COVID-19 on trade in or with the UK,  provides key recommendations and forecasts for online businesses, and shows how fintech innovations can simplify cross-border trading. The whitepaper was built on insights from two surveys: one of 1,002 UK consumers and one of 500 business leaders in the UK, conducted by ECOMMPAY in collaboration with Censuswide in March 2021.

Furthermore, larger businesses have been more significantly impacted, with only 14% of companies with less than nine workers affected, next to almost half (47%) of those with more than 250 employees. Besides, 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 biggest issues that UK businesses cite regarding free trade are border control issues (24%), lack of clarity around law changes (22%) and lack of local European knowledge (16%). Brexit is also dissuading UK businesses from scaling: 17% of businesses currently see Brexit issues as the biggest barrier for overseas expansion.

The report also finds that UK businesses are struggling with the new circumstances of Brexit, with more than a quarter (26%) admitting they are not clear on how best to reach EU customers to facilitate payments.Several payment methods have become more expensive as a result of Brexit, leading both merchants and consumers to look for alternative options, and driving fintech innovations in efforts to ease cross-border trading. 

ECOMMPAY’s internal data shows digital wallet usage has tripled in three years, while Open Banking has continued to drive innovation within the payments sector. Moreover, one on five (20%) 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. 

Additionally, the whitepaper reveals that Brexit is also a factor in consumer confidence; 18% of consumers are worried about the security of online payments post-Brexit across borders. The data indicates merchants need to communicate with customers around the implications of Brexit and the safety measures being taken to mitigate risks and keep shoppers safe. Besides, 68% are also worried about the cost of goods rising for online cross-border purchases since Brexit.