Digital River establishes legal selling entity in the UK to mitigate interchange fee increases

328 Views

Digital River, an experienced global commerce enabler for established and fast-growing brands, announced today it has established a legal selling entity in the United Kingdom to mitigate the impact of increased Visa and Mastercard interchange fees on merchants and shoppers. These fees are tied to the UK’s withdrawal from the European Union (EU). With this new entity, Digital River provides a solution that will enable Digital River’s EU clients that sell online to customers in the UK to avoid being subject to these additional costs.

In October, Visa increased the interchange fee on digital transactions for EU merchants selling into the UK from 0.3% to 1.5%, while the interchange fee for cross-border debit card payments made online rose from 0.2% to 1.15%. Mastercard similarly raised its fees.

The British Retail Consortium’s latest annual Payments Survey shows that over 80% of retail spending involves debit or credit cards, costing retailers over £1.3 billion in transaction fees. Digital River’s UK entity protects its EU clients that sell into the UK using the new entity from having to pay these increased interchange fees. For ecommerce sites without similar protections, increased fees would either have to be absorbed by businesses, or could even fall to shoppers to pay.

To simplify sales in the UK, Digital River provides clients with a Merchant of Record (MoR) solution that takes on payments, tax remittance, compliance and fraud mitigation. With a new local business entity in the UK, Digital River can now route transactions in country without triggering increased interchange fees for EU merchants that sell into the UK to customers who are purchasing with their UK-issued credit or debit card, and have a UK billing address.

Commenting on the new legal entity, Adam Coyle, CEO of Digital River said, “The payments landscape continues to shift and evolve at a rapid speed. Brexit and the resulting increased interchange fees that many transactions are incurring are yet another challenge for merchants and their UK customers. Digital River’s new legal entity sets out to mitigate the impact of these changes so merchants can focus on what matters most, their customers.”

Whilst some merchants are either absorbing the increased fees, including passing them on to consumers, Digital River’s new UK entity means Digital River clients can continue selling in the UK without adding another layer of complexity to cross-border ecommerce.

For more information visit DigitalRiver.com.