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Most citizens will never notice the price difference. Any costs that get passed on will be rolled up into extra costs of doing business with U.K. now that we’ve

Most citizens will never notice the price difference. Any costs that get passed on will be rolled up into extra costs of doing business with U.K. now that we’ve left the EU. The big ticket items there will be VAT, and customs duties, which are measured in 10’s of %. So realistically customers will never know to complain about this fee increase once the news cycles ends.

neximo64 6y ago
In the UK payment is moving away to even cheaper methods using Open Banking with Faster payments, which is technically near free - a bit like Giropay. So on the payment end there is an alternative coming better for merchants anyway.
- avianlyric 6y ago
  I personally doubt that Open Banking is the answer here. Most open banking payment run over Faster Payments, which is owned by a company called VocaLink, which is in turn owned by (drum roll please) MasterCard. If Open Banking takes off, then expect MasterCard to start increasing their Faster Payments fees (they exist, your bank just eats the cost). But first you need to convince customers to give up the protections offered by Debit/Credit cards. There’s basically 0 recourse for a consumer to get their money back if they’re scammed via Open Banking. Unlike Credit/Debit cards where chargebacks are an option.
  - neximo64 6y ago
    Mastercard are likely to not change the FPS fee as Vocalink is easy to supplant. There are bigger issues at play set out for this coming decade. For example card not present transactions are going to have their fees jacked up (internet transactions) vs in store ones. The real battle will be against this. Chargebacks not being possible are beneficial too, it depends on your merchant. For instance topping up your brokerage account with chargebacks possible would be very problematic.
    - avianlyric 6y ago
      > Mastercard are likely to not change the FPS fee as Vocalink is easy to supplant. What on earth makes you think this is true? Do you have any idea how complex it is to set up an inter-bank payment scheme? Vocalink are not even remotely easy to supplant, banks will just pass the extra costs onto merchants and wash their hands of it. There’s no profit in providing free financial services. > For example card not present transactions are going to have their fees jacked up No doubt. MasterCard and Visa are both looking to make sure profits stay healthy. But if there’s something I know for sure, it’s that both companies know how to extract their pound of flesh. They’re masters of creating new fees, if they want to increase fees on card not present, then they will. If they can’t do it directly, they’ll find a way to do it indirectly. > For instance topping up your brokerage account with chargebacks possible would be very problematic. Chargebacks are not a simple one-size-fits-all thing. There are hundreds of pages of rules outline when you can and can’t raise chargebacks. There are also ways to allow merchants to immunise themselves against chargebacks. It’s already possible to top up brokerage accounts using a Credit/Debit card. That’s because carve outs already exist in the chargeback rules which make it very difficult for a customer to raise a valid chargeback in those scenarios.
      - neximo64 6y ago
        > What on earth makes you think this is true? Do you have any idea how complex it is to set up an inter-bank payment scheme? Vocalink are not even remotely easy to supplant, banks will just pass the extra costs onto merchants and wash their hands of it. There’s no profit in providing free financial services. I know this industry quite well. Btw, this has already happened. NPSO now runs Faster payments not Vocalink anymore. Vocalink sells the stuff to banks to connect to NPSO & that helps square up card transactions too. You can also connect to NPSO directly using documented open ISO standards and not pay Vocalink anything. [1] https://www.bankofengland.co.uk/news/2018/may/consolidation-of-three-uk-payment-system-operators https://www.bankofengland.co.uk/news/2018/may/consolidation-...
        avianlyric 6y ago
        Except VocaLink still own and operate FPS’s central infrastructure, that’s not going to change anytime soon. Even if there was the political will to change it, there isn’t really the technical capability. They also own the only real FPS payment gateway (although you don’t need to use them). It’s true that Pay.UK sets the participants fees etc But it’s not hard to see them increasing them to help deal with fraud costs if Open Banking payment initiation takes off. I know this because I was involved in preventing the fees from being increased that last time this was proposed. You can also bet money that MasterCard will use their ownership of VocaLink to find a way to increase their cut of FPS fees.
- amaccuish 6y ago
  I try to use giropay when I can to order food in the hopes the restaurant gets to keep a little more.
martinald 6y ago
VAT is not a big change - you won't pay the EU member state VAT and instead will pay UK VAT. It's basically neutral, or in a few countries cheaper. Custom fees are the big problem, which is basically profiteering from Royal Mail and co. I really doubt it costs £8-12 to clear a small package through UK customs (especially long term when the systems are bedded in more). For example, Amazon doesn't charge customs duties on goods from the EU coming into the UK, so my guess is it is actually very low cost. My hope is that over time there will be some competitiveness on customs fees.
- toyg 6y ago
  You just have to read some of the past threads where people involved in logistics pop in, to realize that the costs are very significant indeed. For one, it takes longer to clear packages, which increases your storage costs; and if a package is refused it cannot be sent back, it has to be stored for a very long time, again impacting profitability (you now need bigger warehouses). Also there are additional checks, so more people involved - the relevant UK civil service has already expanded to deal with the increase in volume of bureaucracy, but actual couriers have not. That means they will be forced to hire more people, again raising costs. That high cost of handling international custom-clearing packages is an average of actual immediate costs and predicted future costs.
  - martinald 6y ago
    I'm not saying there are no additional costs, they obviously are. What I'm saying is the current costs should come down in the UK. It has a ruthless courier marketplace. Amazon is either eating the costs (possible, granted, but odd as they don't do it for other countries) or have got costs so low to clear that they're not charging customers for them. £12 to clear a small package is obviously way over the actual cost incurred by the delivery companies.

neximo64 6y ago

In the UK payment is moving away to even cheaper methods using Open Banking with Faster payments, which is technically near free - a bit like Giropay. So on the payment end there is an alternative coming better for merchants anyway.

avianlyric 6y ago
I personally doubt that Open Banking is the answer here. Most open banking payment run over Faster Payments, which is owned by a company called VocaLink, which is in turn owned by (drum roll please) MasterCard. If Open Banking takes off, then expect MasterCard to start increasing their Faster Payments fees (they exist, your bank just eats the cost). But first you need to convince customers to give up the protections offered by Debit/Credit cards. There’s basically 0 recourse for a consumer to get their money back if they’re scammed via Open Banking. Unlike Credit/Debit cards where chargebacks are an option.
- neximo64 6y ago
  Mastercard are likely to not change the FPS fee as Vocalink is easy to supplant. There are bigger issues at play set out for this coming decade. For example card not present transactions are going to have their fees jacked up (internet transactions) vs in store ones. The real battle will be against this. Chargebacks not being possible are beneficial too, it depends on your merchant. For instance topping up your brokerage account with chargebacks possible would be very problematic.
  - avianlyric 6y ago
    > Mastercard are likely to not change the FPS fee as Vocalink is easy to supplant. What on earth makes you think this is true? Do you have any idea how complex it is to set up an inter-bank payment scheme? Vocalink are not even remotely easy to supplant, banks will just pass the extra costs onto merchants and wash their hands of it. There’s no profit in providing free financial services. > For example card not present transactions are going to have their fees jacked up No doubt. MasterCard and Visa are both looking to make sure profits stay healthy. But if there’s something I know for sure, it’s that both companies know how to extract their pound of flesh. They’re masters of creating new fees, if they want to increase fees on card not present, then they will. If they can’t do it directly, they’ll find a way to do it indirectly. > For instance topping up your brokerage account with chargebacks possible would be very problematic. Chargebacks are not a simple one-size-fits-all thing. There are hundreds of pages of rules outline when you can and can’t raise chargebacks. There are also ways to allow merchants to immunise themselves against chargebacks. It’s already possible to top up brokerage accounts using a Credit/Debit card. That’s because carve outs already exist in the chargeback rules which make it very difficult for a customer to raise a valid chargeback in those scenarios.
    - neximo64 6y ago
      > What on earth makes you think this is true? Do you have any idea how complex it is to set up an inter-bank payment scheme? Vocalink are not even remotely easy to supplant, banks will just pass the extra costs onto merchants and wash their hands of it. There’s no profit in providing free financial services. I know this industry quite well. Btw, this has already happened. NPSO now runs Faster payments not Vocalink anymore. Vocalink sells the stuff to banks to connect to NPSO & that helps square up card transactions too. You can also connect to NPSO directly using documented open ISO standards and not pay Vocalink anything. [1] https://www.bankofengland.co.uk/news/2018/may/consolidation-of-three-uk-payment-system-operators https://www.bankofengland.co.uk/news/2018/may/consolidation-...
      - avianlyric 6y ago
        Except VocaLink still own and operate FPS’s central infrastructure, that’s not going to change anytime soon. Even if there was the political will to change it, there isn’t really the technical capability. They also own the only real FPS payment gateway (although you don’t need to use them). It’s true that Pay.UK sets the participants fees etc But it’s not hard to see them increasing them to help deal with fraud costs if Open Banking payment initiation takes off. I know this because I was involved in preventing the fees from being increased that last time this was proposed. You can also bet money that MasterCard will use their ownership of VocaLink to find a way to increase their cut of FPS fees.
amaccuish 6y ago
I try to use giropay when I can to order food in the hopes the restaurant gets to keep a little more.

martinald 6y ago

VAT is not a big change - you won't pay the EU member state VAT and instead will pay UK VAT. It's basically neutral, or in a few countries cheaper. Custom fees are the big problem, which is basically profiteering from Royal Mail and co. I really doubt it costs £8-12 to clear a small package through UK customs (especially long term when the systems are bedded in more). For example, Amazon doesn't charge customs duties on goods from the EU coming into the UK, so my guess is it is actually very low cost. My hope is that over time there will be some competitiveness on customs fees.

toyg 6y ago
You just have to read some of the past threads where people involved in logistics pop in, to realize that the costs are very significant indeed. For one, it takes longer to clear packages, which increases your storage costs; and if a package is refused it cannot be sent back, it has to be stored for a very long time, again impacting profitability (you now need bigger warehouses). Also there are additional checks, so more people involved - the relevant UK civil service has already expanded to deal with the increase in volume of bureaucracy, but actual couriers have not. That means they will be forced to hire more people, again raising costs. That high cost of handling international custom-clearing packages is an average of actual immediate costs and predicted future costs.
- martinald 6y ago
  I'm not saying there are no additional costs, they obviously are. What I'm saying is the current costs should come down in the UK. It has a ruthless courier marketplace. Amazon is either eating the costs (possible, granted, but odd as they don't do it for other countries) or have got costs so low to clear that they're not charging customers for them. £12 to clear a small package is obviously way over the actual cost incurred by the delivery companies.