KUALA LUMPUR - Malaysians could lose up to RM3.3 billion annually by 2029 if foreign exchange (forex) hidden fees are left unchecked, according to new research commissioned by Wise.
The company said Malaysians lost around RM2.99 billion (US$655 million) to hidden forex fees in 2023, with 76 per cent of those who transferred money internationally believing they "somewhat” or "fully” understood the true costs of these payments. It noted that only 18 per cent of these Malaysians recognised the hidden forex margins impacting their transfers.
"For example, an international transfer of US$1,000 (approximately RM 4,424) advertised as 'fee-free' could cost RM159 in hidden forex markups if a 3.6 per cent margin is applied.
"While upfront fees are usually stated by providers, many providers tend to add an undisclosed markup on the exchange rate, rather than using the fair, mid-market rate, resulting in consumers paying more than expected," it said in a statement.
Wise is a global technology company involved in money transfers.
The company also revealed that 52 per cent of Malaysians used PayPal to send money abroad, followed by banks (44 per cent) and Western Union (33 per cent).
"While many assume these providers are transparent about their fees, hidden exchange rate markups often go unnoticed. As more Malaysians send money abroad for family support, education and healthcare costs, these charges can quickly add up, becoming a significant financial burden," the company said.
Hence, Wise advised Malaysians who send money overseas to compare the exchange rate with the mid-market rate, watch out for "zero-fee” or "low-fee” claims, and read the fine print to spot hidden forex fees. - BERNAMA