The Impact Of Brexit On Payments

At 11pm on 31st January 2020, the UK left the European Union and Brexit was finally fulfilled. Depending on which side of the aisle you sit, you either celebrated escaping a debt-ridden trading bloc or see this as an attempt to go back to nineteenth-century Britain – we’ll stay neutral! However, one thing is for sure – the world of payments has changed forever. Some of the true impacts of Brexit are just starting to be felt in the UK, and this couldn’t be truer when it comes to payments, fees, and transactions. Continue reading to find out if your business is prepared for the upcoming changes.

What will be the impact of payments by Brexit?

After leaving the EU, it’s generally expected that the UK will see a period of currency volatility, especially when it comes to exchange rates between the UK and neighbouring EU countries. This means that UK company profit margins might be squeezed or customers might look elsewhere for better deals as prices increase. Another issue is EU passporting which is perhaps one of the largest concerns around how Brexit will impact businesses. Financial services will no longer be entitled to provide services in the EU unless they get extra authorisation. Businesses will also lose their EU passport status, meaning there may be some limitations placed on which businesses they can do transactions with.

Another concern is the amount of red tape and changes in trade rules that will impact UK businesses. Rather than a consistent set of rules that rarely changes, trade rules could be amended several times in a short space of time. To combat this, businesses must ensure that they keep up to date with the latest changes in trade rules.

What do businesses need to consider when it comes to payments?

In order to stay ahead of the game in a post-Brexit world, here are some key tips from Axcess Merchant Services:

• It’s vital that your pricing structure takes into account the current regulations around accepting online payments. With transaction fees changing on a regular basis, it’s important to stay up to date to ensure that your business is still prospering during this uncertain time.
• Ensure that your business offers local payment methods for your customers. This will help in ensuring that your UK customers remain loyal and don’t jump ship to EU competitors.
• The VAT rules have changed for UK businesses, and they are important to consider to ensure that you’re paying the correct amount to HMRC.
• If your business currently sells products or services in both the UK and EU, you’ll now need a UK EORI (Economic Operator Registration and Identification Number) in addition to an EU EORI. Failure to receive authorisation for these accreditations could mean that your business could face fines in the future.

Make sure you bookmark the Axcess Merchant Payments blog for more insights into the ever-changing world of payments. Our recently revealed review of payment trends in 2021 gave a snapshot of the technologies changing the way the world does business and how they will change the way you see payments in the near future.

If you are concerned about how these changes might affect your business, get in touch and speak with one of our payment experts today.