consumers in the South Asian nation paid over ₹263 billion (US$3.5 billion) on foreign exchange fees, which amounted a significant increase from 2016, when this figure was at ₹187 billion. According to the tech company, of the ₹263 billion spent last year, only ₹166 billion was spent on transaction fees, while the remainder was charged as hidden as exchange rate mark-ups on currency conversions, payments and card purchases.
“Any time the rupee changes into a dollar or Euro or any other international currency or vice versa, consumers find themselves tangled in a web of hidden exchange rate mark-ups, high fees, delays, and small print,” Wise India’s Country Manager Rashmi Satpute noted. “Today’s research exposes a severe lack of transparency in foreign exchange transactions – for far too long consumers have been fleeced into paying unnecessary costs for foreign transactions when providers hide fees in exchange rate mark-ups.”
The study further revealed that although there has been a decline in the overall amount spent by Indians on transaction fees for transferring money abroad over the past five years, there has been a continuous growth in the fees paid to exchange rate margins. “This highlights a lack of transparency in remittance fee structures, putting consumers at risk of hidden fees as they unknowingly pay more than advertised for the remittance service in the form of a marked up exchange rate,” Wise said in a press release.
In the case of inward remittances, money lost to exchange rate margins have grown from ₹42 billion to ₹79 billion during the past five years. There was also a ₹38 billion increase in fees paid to transaction costs during this period.
