Kuala Lumpur, 13 March 2025 — Malaysians unknowingly lost RM 2.99 billion to hidden foreign exchange (FX fees) in 2023, according to a new research commissioned by Wise, the global technology company building the best way to move and manage money around the world.
Three-quarters (76%) of Malaysians who transfer money internationally believe they ‘somewhat’ or ‘fully’ understand the true costs of these payments. However, only 18% of these Malaysians recognised the hidden FX margins impacting their transfers.
Take this example: an international transfer of USD 1,000 (approximately RM 4,424) advertised as “fee-free” could actually cost RM 159 in hidden FX markups if a 3.6% margin is applied. While upfront fees are usually stated by providers, many providers tend to add an undisclosed markup on the exchange rate, rather than using the fair, mid-market rate (the rate typically seen on Google). This results in consumers paying more than expected.
The findings, drawn from independent studies by Edgar, Dunn & Company (EDC) and YouGov, highlights the need for greater fee transparency in cross-border payments, and better consumer awareness of hidden fees.
Think you know the cost of sending money abroad? Think again!
In 2023 alone, Malaysians lost an estimated RM 2.99 billion (USD 655 million) to hidden FX fees— enough to buy every Malaysian a cup of teh tarik every day for a month. And the problem is only getting worse. If these hidden fees continued unchecked, Malaysians could lose up to RM 3.3 billion annually by 2029—a costly price to pay for hidden fees.
How Are Malaysians Sending Money Overseas?
The survey also explored how Malaysians who have sent money abroad are doing so, with PayPal leading the way (52%), followed by banks (44%), and Western Union (33%). While many assume these providers are transparent about their fees, hidden exchange rate markups often go unnoticed. As more Malaysians send money abroad for family support, education and healthcare costs, these charges can quickly add up, becoming a significant financial burden.
3 Steps to Spot Hidden FX Fees and Keep Your Hard-Earned Money
The mid-market rate is the rate that you will usually see on Google or Reuters, which is the midpoint between the buy and sell rates on global currency markets. To check, simply search “1 USD to RM” on Google or use Wise’s currency converter. Then, compare this to your provider’s rate—if it’s worse, they’re adding a markup.
If a provider advertises zero fees, chances are they’re making up for it with a hidden FX markup. Always compare their exchange rate to the mid-market rate to ensure you’re not losing money.
Always read the terms and conditions. The fine print can reveal hidden fees that are not advertised elsewhere, such as foreign transaction fees charged by credit card companies. Always check the fine print before making a transfer.
By following these steps, Malaysians can avoid unnecessary losses and get the best deal when sending money abroad. More savings mean more teh tarik—cheers to smarter international transfers!
