UK small businesses spend £4bn a year in EU money transfers
New study claims a lack of transparency is making it difficult for small firms that trade with the euro zone to get the best deals
UK banks are charging small businesses that trade with the euro zone almost £4bn a year in hidden transfer fees, new research conducted by Accourt on behalf of Money Mover has claimed.
Surveying six of the country’s biggest banks to find out the costs of making a euro transfer, the study concluded that banks are, on average, charging small and medium enterprises a total 2.43% of the value transferred which equates to a value of £3.96bn.
Accourt stated that it unable to assess which banks charge the most for foreign currency transfers because of the volatility of the foreign exchange market, but claimed that a “lack of transparency on how bank calculate exchange rates” is making it difficult for small firms to get the best deals.
Furthermore, the study revealed that outgoing payments to the rest of Europe by small businesses in 2014 amounted to £162.92bn.
Allegedly, 96% of the revenue for a bank on a £75,000 EU transaction came from a margin added to the money market exchange rate, known as the spread, but this was not disclosed to the customer.
Money Mover CEO, Hamish Anderson, said of the study findings:
“When it comes to international payments, it’s clear that the UK’s major banks are overcharging and underserving their small and medium enterprise customers. The UK’s banks are collectively failing to give small and medium businesses the knowledge, transparency and visibility which they need to make an intelligent and informed decision.
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“This lack of transparency is not only unfair and uncompetitive, it’s also costing the UK’s small firms precious cash in unnecessary fees.”
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