According to new research by YouGov and Consumer Intelligence, the average British person will lose £16,796 to marked up exchange rates when spending abroad over their lifetime. Today, fintech unicorn TransferWise, personal finance chatbot Plum and financial complaints service Resolver have teamed up to launch the Fight Overseas Fees campaign, helping to tackle unfair hidden fees and charges.
Using a live calculator as part of the campaign, UK consumers will be able to find out how much they’ve been charged in hidden mark ups when spending in a foreign currency, and reveal their total loss over the past year. Over 8,000 British people were consulted as part of the YouGov research, taking into account the potential costs for studying abroad, overseas weddings, holidays and overseas retirement.
“The Fight Overseas Fees calculator not only provides some much-needed transparency in the banking sector, but also gives Brits a way to act on their unfair charges and hopefully make some real change,” added Plum CEO and co-founder Victor Trokoudes.
“Consumers need to know that they don’t need to miss out when it comes to spending internationally. There’s companies like Plum,TransferWise and Resolver that can help and refuse to accept the status quo when it comes to being overcharged.”
Based on analysed spending habits between the ages of 16 and 65, the research estimates that the average UK family has a lifetime loss of over £800 just from their annual summer holiday as a result of in-store foreign cash exchanges. Retirees are also estimated to lose £1495 when relocating overseas, and couples paying for overseas weddings can lose as much as £160 in marked up exchange rates while booking online or paying for services abroad.
“Today’s findings expose the total lack of transparency in fees and charges in the foreign exchange industry,” commented Jenifer Swallow, general counsel at TransferWise. “Nowadays, so many of us have significant life experiences that involve spending abroad: family holidays, getting married overseas, travelling for work. It is time we knew the true cost involved and the money we are losing to the banks in hidden fees.”
It is without a doubt that the influx of fintech firms advocating for low-cost spending abroad at interbank rates has certainly increased competition in financial services for incumbents to begin offering the same. Elsewhere, recent research conducted by Standard Bank in Africa has shown that its lack of legacy foreign exchange trading infrastructure has boosted fintech activity and innovation.
Only five years ago, almost 90 per cent of all foreign currency trades in South Africa happened over the telephone. But today, despite a complicated political and capital-controlled environment, approximately 75 per cent of trades are now conducted digitally.
According to the bank, 57.6 per cent of the world’s 174m active mobile money accounts are located in Sub-Saharan Africa, demonstrating the region’s fintech capabilities and early adoption nature.