TransferWise has waged further war with foreign exchange providers with a new manifesto released today.
The London-based startup has launched its ‘Stop Hidden Fees’ campaign which calls on banks and brokers to provide greater transparency in the exchange of currency.
YouGov research cited in the manifesto revealed that 73% of Brits say government needs to do more to tackle misleading pricing.
‘Free’ is a myth
TransferWise hopes to stop banks and other foreign exchange providers from claiming ‘free’ or ‘0% commission’ when in fact there are a number of hidden fees.
Other research in the manifesto from YouGov, The World Bank, and Charterhouse Research found that banks and brokers charge as much as 10% for holiday money and 5% for sending money abroad despite claiming their services are free. It also revealed that Britain lost £1.3bn in exchange rate fees for buying holiday money in 2013.
The manifesto has been welcomed by Shadow Cabinet Minister Chi Onwurah who explained that after the recent forex scandal “public confidence in foreign exchange transactions is at an all time low”.
TransferWise’s petition and campaign
TransferWise has also launched a petition calling for the end of hidden fees in foreign exchange pricing, in partnership with Change.org.
Speaking about the campaign, cofounder Taavet Hinrikus insisted that the issue of hidden fees is “incredibly important” to him.
Hidden fees are so pervasive in the industry, we sometimes struggle to convince potential customers that “free” or “0%” commission” services aren’t free at all.
Financial institutions hitting back
Since being founded in 2011, TransferWise has transferred over £1bn worth of customers’ money, claiming to have saved its customers over £45m in banking fees.
Now however, traditional financial institutions appear to be hitting back. Last week, Travelex announced a £25m fund to invest in startups as it hopes to fight back with its own ‘digital revolution’.
TransferWise are not the only startup in the foreign exchange market. Over the past few years, a number of competitors have emerged, including WeSwap who recently raised $7.5m.