The $800 million problem facing America’s SMBs

New research commissioned by Wise reveals that small business leaders are seeing their hopes of global expansion dashed by a range of macroeconomic and logistical challenges - the biggest being the cost and complexity of international payments.

And it’s no surprise - US SMBs lost almost $800 million to hidden fees when sending money abroad in 2023.

Here at Wise, we know a thing or two about just how big of an issue managing money internationally can be. For over 13 years, we have been working to solve the challenges of cross-border payments for personal and business customers, and both encouraging and working with other industry players to help them do the same.

Find out how much SMBs in the US lost to hidden fees last year, and see the breakdown by state to see the impact on your local businesses.

Read the national report Read the state report

SMBs face numerous challenges to operating internationally

31% would enter new markets if international payment costs were reduced.
59% have to increase the price of their goods and services due to the high cost of sending money internationally.
48% say the high cost of international payments reduces the amount they can pay staff. (SMBs employ over 61.7 million Americans, who might be paid more if businesses weren't fronting the high cost of sending money internationally.)

It’s not just international payments that hold small businesses back. Leaders say inflation, taxes, and regulatory barriers are key challenges to expansion.

Calls for price transparency

The vast majority (82%) of small business leaders surveyed either don’t believe that their bank is transparent about the costs of cross-border payments, or aren’t sure. '**'

To change this, a resounding 77%* of SMB leaders in the US agree that regulators and/or policymakers should ensure that financial services providers are honest and transparent about what they charge small businesses for international payments.

Even more (81%*) believe that financial services providers should proactively demonstrate honesty and price transparency on their own, without regulatory interventions.

There is a clear expectation that financial services are transparent and honest with their customers by default. Because, of course, that’s the right thing to do.

To create change, SMBs should be putting the pressure on their own financial providers to be clear on costs, and if they won’t, they should trust someone else with their hard-earned cash. Otherwise, financial providers can continue to get away with inflating exchange rates and putting more money in their own coffers.

Wise has been fighting for price transparency since our founding. It’s what keeps us ticking and makes us different. We’re so transparent that we’ll tell you when we’re not the cheapest provider, so that you can make the best decision for your business.

Compare providers here.

See how Wise Business helped one of Austin’s own SMBs establish a global brand, manage 19 currencies in one convenient app and keep more of what they earn by avoiding hidden fees.

Read Chris' story

How to spot hidden fees

Hidden exchange rate markup

Some banks present their exchange rate as the exchange rate. But they are in fact adding a markup, they just don't tell you about it.

In addition to transfer fees, a currency exchange rate may also apply. The provider may also make money from currency exchange.

Image showing example of where a provider hides their fees

Misleading upfront fees

Some banks say a transaction is free or there is just a low upfront fee. This tricks people into thinking that's the whole story, when most of the fees are hidden in an inflated exchange rate.

Image showing example of where bank hide their fees

Take your business global today

Dreams of taking your small business international shouldn't be held back by costly and complex financial services.

About this research:

Hidden Fees Research - Conducted by Capital Economics

Capital Economics has estimated the fees on foreign exchange transactions paid by US consumers and small and medium-sized businesses nationally and in every state. The estimates are produced for the years 2018 to 2023 using data from US and international organizations as well as research of the typical transaction fees and exchange rates margins charged in five areas: consumer travel spending abroad, remittances sent from the US, trade in goods and services by small and medium-sized enterprises and portfolio investment earnings abroad. Data is accurate as of January 10, 2024.

SMB Research - Conducted by Censuswide

A survey of 1,003 “business decision makers” working at small- and medium-sized businesses in the U.S. (businesses with 1-500 employees) - minimum 125 per Texas, California, Florida, and New York with the remaining sampled across the rest of the U.S. – conducted by Censuswide between April 4 and 16, 2024. Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct and ESOMAR principles. Censuswide is also a member of the British Polling Council.

The testimonial was voluntarily provided by a Wise Business customer for use in a case study.

Screenshots collected in April 2024. This is a one-off snapshot from the provider's payment journey at a specific point in time. These payments flows are subject to change. The exchange rate markups may fluctuate.

'*' ‘Strongly agree’ and ‘Somewhat agree’ responses combined

'**' ‘Strongly disagree’, ‘Somewhat disagree’ and ‘Somewhat agree’ responses combined