MANILA, Philippines – Sending money home might be costing you more than you think. A new study by remittance service Wise reveals that Filipinos lost P8.37 billion to hidden foreign exchange fees in 2023 alone.

For millions of Filipinos working abroad and those in the gig economy, remittances are a financial lifeline. Whether it’s an overseas Filipino supporting their family or a freelancer getting paid by foreign clients, cross-border transactions play a crucial role in the country’s economy. In 2024 alone, overseas Filipinos sent home over $38 billion, making the Philippines one of the world’s largest recipients of remittances.

But while remittances fuel household spending and economic growth, many Filipinos may be losing more than they realize due to hidden foreign exchange (FX) fees. A recent study commissioned by remittance service Wise found that Filipinos unknowingly lost approximately P8.37 billion in hidden FX fees in 2023.

The cost of remittances has long been a global concern, with the United Nations Sustainable Development Goal 10.c aiming to reduce transaction costs to less than 3% by 2030. However, hidden FX markups continue to inflate costs beyond what senders expect.

A Wise survey found that while 72% of Filipinos believe they understand international payment costs, only 18% fully recognize the impact of hidden FX markups. Meanwhile, 57% think they know the cost of their remittance but actually don’t, while another 25% are completely unaware of the real costs involved. In other words, many senders may be choosing remittance services that charge more than they realize.

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How providers hide remittance fees

Many money transfer providers advertise “zero fees” or “free transfers,” but that doesn’t mean the transaction is free. Instead of charging an upfront fee, some providers apply an undisclosed markup to the exchange rate — meaning you get fewer pesos for every dollar, euro, or pound you send.

Using an example by Wise, if you were to transfer $10,000 (approximately P578,000) through a provider advertising “no fees,” you might expect to receive the full amount in pesos at the standard exchange rate. But if the provider adds, say a 3.6% margin instead of using the mid-market rate that you typically see on Google, you could lose as much as P21,187 in the conversion process for $10,000.

For its part, Wise has been advocating for greater transparency in remittance pricing.

“At Wise, transparency isn’t just a promise – it’s built into how we operate,” said Areson Cuevas, country manager for Wise Philippines. “We ensure customers know exactly what they’re paying upfront, so they can make informed choices and get the most value from their money.”

Wise, which launched its Wise Account and Prepaid Card in the Philippines in May 2024, allows users to send, receive, and spend in over 40 currencies using the mid-market exchange rate — the one you see on Google — without hidden fees. The company also integrated with InstaPay in November 2024, enabling instant transfers of up to P50,000 and processing larger transactions within 24 hours.

“The Philippines already has a solid regulatory framework in place to support transparent remittance pricing. By fully aligning with these rules, the country could unlock P8.37 billion for the economy, benefiting families, businesses, and the broader financial system,” Cuevas said.

So, how do you avoid hidden FX fees? Always check if your remittance provider offers the mid-market rate (which you can verify on Google or financial platforms like Bloomberg). Be wary of services that promote “zero fees” or “low fees” without disclosing their exchange rate markup.

You might also want to compare several remittance providers to see what best works for you. In recent months, Ria Money Transfer expanded in the Philippines through a new partnership with GCash and the opening of a local office in Makati.

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Meanwhile, Pomelo, a fintech startup, introduced a remittance-linked card that lets users send money while earning Grab rewards.

For those looking for alternatives to traditional remittance providers, crypto remittances are also gaining traction. Platforms like Coins.ph allow users to convert money into stablecoins, which are digital currencies pegged to real-world assets, providing a low-cost, near-instant way to send funds internationally.

The findings of Wise’s research come from two independent studies commissioned by Wise, conducted by Edgar, Dunn & Company (EDC) and YouGov. EDC’s research, conducted between September and November 2024, analyzed the cross-border payments landscape using a market sizing model that leverages various data sources to project growth rates and allocate market size across different regions and customer segments. The study also examined hidden fees to assess trends and identify areas of concern.

Meanwhile, YouGov’s survey, conducted online from December 12 to 16, 2024, gathered insights from 1,044 Filipinos aged 18 and above to gauge their understanding of international payment costs. The data was weighted by age, gender, and region to reflect the latest Filipino population estimates. — Rappler.com

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