KUALA LUMPUR (March 13): In 2023, Malaysians unknowingly lost RM2.99 billion due to hidden foreign exchange (FX) fees, according to research commissioned by UK-based financial technology company, Wise.

Although 76% of Malaysians who send money internationally think they understand the costs, only 18% realise the impact of hidden FX fees.

For example, a "fee-free" international transfer of US$1,000 could actually cost RM159 extra due to hidden FX markups.

Many providers add these markups instead of using the fair exchange rate, leading to higher costs for consumers. The research shows the need for more transparency and awareness about these hidden fees.

Losses from hidden FX fees could reach RM3.3 billion annually by 2029, according to the study.

In a statement on Thursday, Wise said less than 20% of Malaysians recognise the hidden FX margins that will affect their transfer cost.

Malaysians mainly use PayPal (52%) to send their money abroad, followed by banks (44%) and Western Union (33%).

To avoid hidden FX fees, Wise suggests three steps: compare the provider's exchange rate with the mid-market rate on Google, Wise, or Reuters; be cautious of "zero-fee" or "low-fee" claims, as these may include hidden markups; and always read the terms and conditions to check for any hidden charges before transferring money.