Using the number given in the Pinegrow thread today: It is economically infeasible to pay your payment processor 5 percent instead of 3? It's annoying, sure, but infeasible?

Specifically you can't use paypal. As they say on the BBC, other payment processors are available and you have to get one that will handle the VAT for you.

You can still offer Paypal via another payment processor.

How about using a provider like Fastspring? Or are their fees too high?

They certainly claim to handle it; I can't really speak as to whether their fees are too high, but it's higher than paypal.