Why we care about hidden fees

People around the world lose billions every year when they send money internationally.

That’s because banks and exchange rate providers can make it hard to understand exactly what you’re paying for. As we explained back in December, there are usually two costs associated with sending money: the fee and the rate. To be more precise, there’s the upfront fee providers charge for their service, and the markup they add to the exchange rate that’s used to convert your money.

Because the markup is rarely stated — and a reference rate is almost never provided — most people don’t realise their rate often contains a hidden fee. And that costs them extra when they send money. A lot extra.

Wise was founded to solve this problem. Because if it’s not clear what your costs really are, providers can charge whatever they want. And they can change their prices at any time — without you knowing.

We believe you should know exactly what sending money internationally really costs.No headaches, no complicated maths.

As a part of this effort, we built our comparison tool, and a whole team dedicated to it. It helps you compare the cost of sending money internationally across providers. The team behind it also monitor the price of sending money with the banks and providers, and see how this price fluctuates with time.

Last month, we came across a great example of a huge, unannounced price change. On the surface, it was a great deal — Western Union were offering a 0 GBP upfront fee. But they suddenly increased the markup on the exchange rate they were offering.

Here’s what that looks like:

The graph shows the total cost (daily average) of sending 800 GBP to EUR from October 2018, until March 2019. The huge spike in late February represents a huge increase in markup on Western Union’s exchange rate. To be clear, this means the cost of sending 800 GBP to EUR tripled overnight.

Here’s how this affected customers sending 800GBP or less:

This is the reason we’re so concerned with exchange rates that don’t explicitly state that a markup’s been applied. Banks and providers can and will bloat the total cost of your transfer without warning. Sometimes, they’ll even do it overnight. And we don’t think that’s fair.

Change is coming — with the EU recently passing a law that forces all money transfer providers to disclose what you’re paying for,and the UK and Australia looking to pass similar legislation. But, until industry standards move towards best practice, we’ll continue to work to show you exactly what you’re paying.