A study by fintech company Wise found that Filipinos lose approximately P8.3 billion annually to hidden fees in international transactions. These fees are often concealed in exchange rates and other charges when making purchases abroad.
The study also revealed that 7 out of 10 Filipinos (72%) believe they understand transaction charges, but only 1 out of 10 actually pay attention to exchange rate markups.
“These hidden fees primarily impact overseas workers, people sending money abroad, such as for children’s education, and freelancers receiving international payments,” said Kristo Käärmann, founder and CEO of Wise.
To show the effect of hidden fees, Wise explained that a customer transferring $10,000 (about ₱578,000) through a traditional bank could lose ₱21,187 to hidden foreign exchange (FX) fees if a 3.6% markup is applied.
This issue led Käärmann to establish Wise in 2011, aiming to provide a more transparent financial solution. The company is now listed on the London Stock Exchange.
Consumers often gravitate toward claims of zero fees, but those costs typically appear later in their transaction or billing records.
The findings, drawn from independent studies by Edgar, Dunn & Company (EDC) and YouGov, emphasize the need for greater fee transparency in cross-border payments, and better consumer awareness of hidden fees.
Real-time FX
Wise provides real-time foreign exchange rates, allowing Filipinos to ensure that what they pay in a country’s local currency is exactly what is charged to their accounts. This transparency has helped Wise grow its customer base, leading to lower fees.
The Asia Pacific region is Wise’s second-largest revenue contributor (20.5%, up 33.7% year-over-year), following Europe (30.8%). North America, the United Kingdom, and the rest of the world follow.
Areson Cuevas, country manager of Wise Philippines, hopes this approach will attract more overseas Filipino worker (OFW) families and freelancers in the country.
Wise entered the Philippine market in May 2024, introducing the Wise Account and Wise Prepaid Card. These products allow Filipinos to hold, send, and receive money in over 40 currencies and make international transactions in more than 160 countries at the mid-market exchange rate, without hidden fees.
Six months after its launch, Wise gained a direct connection to InstaPay, the Philippines’ real-time payment system. This integration enabled instant transfers to Philippine pesos (PHP) and provided more convenient funding methods for Filipino customers. Wise customers could send up to PHP 50,000 instantly from 28 currencies, with larger amounts processed within 24 hours.
In December 2024, Wise introduced PHP Account Details, allowing freelancers, international students, and expats to receive local PHP payments with zero fees directly into their Wise Account.