PayPal is introducing new fees for payments between businesses in the UK and those in Europe, from November.

British businesses will be charged a 1.29% fee for payments from the European Economic Area and vice versa.

Most currently pay about 0.5% in similar charges, which have remained unchanged since before the UK left the EU customs union and single market.

PayPal said it was now incurring extra costs, such as the rise in interchange fees between the UK and EEA.

European rules capping credit and debit card interchange fees at 0.2% and 0.3% no longer apply to UK businesses, reports BBC.

And both Visa and Mastercard have announced they will raise them fivefold from mid-October.

‘Highly competitive’

The EEA is made up of the 27 remaining European Union states plus Iceland, Liechtenstein and Norway.

And the new charges apply to the whole of the UK, Guernsey, Jersey, Gibraltar, and the Isle of Man.