Wise has reported that HSBC has the highest fees for exchange rates, with some fees hidden from its customers.
The payment infrastructure provider has studied exchange rates between December 2023 and January 2024. For GBP to EUR, Wise has reported that HSBC has the highest fee for exchange rates at 3.7%, and the highest fee for GBP to USD at 3.7%.
In regards to GBP to EUR, HSBC’s competitors’ fees were all lower, with Lloyds at 3.6%, Barclays at 2.75% and NatWest, TSB and Santander all at 2.5%. In the case of GBP to USD, Lloyds followed HSBC at 3.6%, TSB at 2.9%, Barclays at 2.75%, NatWest at 2.5%, and Santander at 2.3%.
Wise has argued that these marked-up exchange rates were not communicated as a cost, as exchanges that didn’t mark up used the mid-market rate.
Payment service providers are required by cross-border payments regulation to “inform the payer prior to the initiation of the payment transaction, in a clear, neutral and comprehensible manner, of the estimated charges for currency conversion services applicable to the credit transfer”.
Kristo Käärmann, CEO and Co-founder of Wise, commented: “For 13 years, we’ve challenged banks to come clean about their fees. Not much has changed voluntarily. Banks still hide their markups and refuse to be transparent, because they believe hiding fees gets customers to overpay.
“They may be right. Not all people and business owners have the time and desire to calculate the hidden margins they are charged.”
Independent research conducted by Censuswide polling of 1,000 UK adults in January found only 22% of the public think their bank gives them a fair deal across products and services. In contrast nine out of 10 of those surveyed said that banks tend to mark-up exchange rates.
This year HSBC launched Zing, a money transfer app, which is a new competitor to Wise. The study found that unlike the bank, HSBC’s app had no hidden fees
Käärmann concluded: “The rise of new companies that are open about fees, including Wise, shows the value of transparency. HSBC’s launch of Zing suggests they understand this too – making their refusal to come clean to their existing customers is quite cynical.
“It’s time banks were transparent about exchange rates, and for hidden fees to finally become a thing of the past.”
