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A €30 billion problem for European consumers and businesses

Hidden fees

Hidden fees in international payments are not new. They are the markup that financial providers add to the exchange rate used to convert money - often without communicating it. They’ve been banned by law since 2020 for consumers sending cross-border payments within the EU.

Yet they remain a problem that has cost people and businesses in the European Union a whopping €30 billion in 2023 alone.

For European consumers, that’s money that could have been used for daily spending, savings or investment, especially during a time of high inflation.

For the EU’s small and medium-sized businesses - who are hit the hardest by hidden fees - that’’s money that could have gone to hiring, product investment, marketing or rainy day savings.


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The EU should act now to end hidden fees in international payments



In 2023, the European Commission revealed the Payment Services Regulation (PSR) to put an end to this issue. It is currently going through the negotiation process. The European Parliament has just finalised its position (and it’s great!): it states that exchange rate mark-ups should be displayed upfront, in a transparent, distinguishable and easily understandable way, before final execution of the payment. The Council of Europe is next in line to give its feedback in the coming months.

True price transparency is the only way consumers and businesses are able to actually compare the market and shop around. Through the Payment Services Regulation, all payment service providers should be required to disclose their exchange rate mark-ups against a live, neutral benchmark rate - ideally, the mid-market exchange rate.

The PSR could put a stop to hidden fees, enabling consumers and businesses to finally know exactly how much they pay.



Is your bank transparent?

International money transfer providers often hide hidden fees in exchange rate mark-ups. Compare your bank's rate to the mid-market exchange rate, the one you’d find on Google's, to see the difference.