Help CentreIntegrations Online payment gatewaysBrexit Impact - Understanding cross-border Fees

Brexit Impact - Understanding cross-border Fees

As of the 15th of October 2021, all transactions between the UK and EEA (European Economic Area) countries will change. The UK is no longer part of the single EEA trading zone, and as a result, the cross-border fee will now apply to transactions from the UK to the EEA and the EEA to the UK.

What are cross-border fees?

Cross-border fees are transaction fees that you absorb as a business when a guest uses a credit or debit card to make a purchase. This fee is a percentage of the purchase made by the consumer and supports handling costs for banks and card issuers.  Cross-border fees for card-not-present (when a consumer isn’t physically presenting their card) transactions have a higher fee and will be more noticeable when receiving bookings online.

What’s changed?

If you’ve ever received a booking from a guest based outside of the EEA, you’ll have likely noticed an enhanced cross-border fee. Up until now, the UK has been part of the EEA and benefitted from lower cross-border fees when receiving payments from EEA merchants and vice versa. The UK is no longer part of the EEA; therefore, the cross-border fees have increased in line with international cards.

What does this mean for my business?

If your property is based in the UK, the new cross-border fee will now apply to your property when it’s booked from a customer based in the EEA. Again, the enhanced cross-border fee will apply to UK transactions if your property is based in the EEA. This will not affect domestic booking (UK to UK).

What does this mean for my guests?

Nothing! Your guests will be unaffected and unaware of this change.

What do I need to do next?

This change will be implemented automatically across all payment processors and card-issuing banks on the 15th of October 2021. Unless you’re a Yapstone customer using HolidayRentPayment, there is no further action needed.

I’m a Yapstone (HolidayRentPayment) customer, how does this impact me?

HolidayRentPayment is a brand of Yapstone. Until now, UK property owners and agencies have benefited from contracting with Yapstone in Ireland rather than Yapstone UK. This has enabled Yapstone to provide its services without UK VAT. The changes to fees due to Brexit mean that it’s now more cost-effective for UK merchants to contract with Yapstone UK rather than Yapstone Ireland. Otherwise, nearly all of your transactions would be classified as international rather than domestic and thus incur the new cross-border fee.

Yapstone will be in contact with you to agree to new terms with Yapstone UK. If you’re a property owner or agency based in the UK, you will now be required to pay UK VAT on booking fees as part of the change surrounding cross-border fees.  For more information, please contact the Yapstone team directly at https://holidayrentpayment.zendesk.com/hc/en-us/requests/new.

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