by Jan Michael Carpo, Reporter
A staggering PHP 8.37 billion drained from Filipino pockets in 2023, not through theft, but through hidden foreign exchange (FX) fees. A new study commissioned by Wise reveals this silent financial burden, severely impacting families and businesses across the Philippines and prompting calls for greater transparency.
“At Wise, transparency isn’t just a promise – it’s how we operate,” stated Areson Cuevas, Country Manager of Wise Philippines, during a recent media briefing.
“We ensure customers know exactly what they’re paying upfront, allowing them to make informed choices. The Philippines has a solid regulatory framework for transparent remittance pricing. By aligning with these rules, the country could unlock PHP 8.37 billion for the economy. Being transparent on fees greatly benefits Filipinos,” he added.
Areson Cuevas, Country Manager of Wise Philippines
Wise study differentiates perceived vs. actual understanding of payment costs
Cuevas’ statement highlights a critical issue exposed by the study, backed by research from Edgar, Dunn & Company (EDC) and YouGov: a disconnect between perceived and actual understanding of international payment costs. While the world strives for remittance transparency, aiming for a 3% fee cap by 2030, many Filipinos remain blind to hidden FX markups.
This “illusion of understanding” is where billions disappear.
Gamaliel Natividad, a self-employed freelancer, shared his experience: “At first, I thought I understood. As a freelancer, I rely on international payments. I used traditional providers but constantly felt I was losing out due to hidden fees and poor exchange rates. The amount I received was always less than expected because of unknown markups.”
“Since switching to Wise, I no longer worry about hidden charges. The mid-market exchange rate and transparent fees mean I get more of my earnings. It has saved me time and money, especially when managing international client payments,” he added.
Unfortunately, Natividad’s experience is not isolated. With over 1.5 million gig economy workers and nearly 2 million OFWs, cross-border payments are a lifeline, making transparency paramount as digital financial services expand.
Call for greater transparency across the industry
The study found a shocking 57% of Filipinos believe they understand payment costs, while only 18% fully grasp hidden FX markups. A “fee-free” USD 10,000 transfer, roughly PHP 578,000, could cost PHP 21,187 with a 3.6% hidden markup, a loss disguised as an exchange rate discrepancy.
The culprit? Providers often advertise low fees but manipulate exchange rates, deviating from the mid-market rate seen on platforms like Google.
The burden falls heaviest on OFWs, gig economy workers, and families relying on international funds. OFWs, who contribute billions to the Philippine economy, see their remittances shrink, impacting essential expenses.
In response, Wise calls for industry transparency, aligning with the Bangko Sentral ng Pilipinas’ (BSP) mandate for fair pricing. The BSP calls for providers to: provide detailed breakdowns of transaction costs, disclose FX markups compared to the BSP reference rate, and eliminate misleading terms that mask hidden charges.
“Transparency isn’t a marketing gimmick; it’s a fundamental right,” emphasized Cuevas. “By adhering to the BSP’s guidelines, we can unlock PHP 8.37 billion for the Philippine economy.”
The global technology company demonstrates its commitment to these principles.
The Wise Account and Prepaid Card empower Filipinos to transact in over 40 currencies at the mid-market rate, free from hidden fees. The company has also integrated with InstaPay for instant PHP transfers and introduced PHP Account Details for seamless local payments. These initiatives reflect their adherence to the BSP’s guidelines and its dedication to empowering Filipinos with transparent financial tools. This commitment urges industry-wide accountability and a shift towards transparent practices.
Wise pursues bank partnerships to expand reach
Kristo Käärmann (left), Wise Chief Executive Officer, together with Areson Cuevas, Country Manager of Wise Philippines, during the media briefing
Wise Philippines aims to further amplify its impact by forging partnerships with local banks. The company hopes to secure its first such collaboration this year, leveraging its cross-border payments infrastructure.
“I think that’s always the objective, but we should give credit that banks take time as well. These are big projects for them, we should give them time,” Wise Chief Executive Officer Kristo Käärmann said during the same briefing.
Cuevas elaborated on the potential benefits, stating Wise’s platform can help banks lower transfer fees. “We would like to speak with more banks, but no timeline yet. The Wise platform, it’s a very successful feature where banks who want to improve their own international payments, to make them cheaper or faster, can make use of our services in the background. So, it’s like a white label within the bank,” he said.
He also highlighted the existing convenience for depositors, who can already transfer funds from their bank accounts to Wise Philippines via InstaPay. By integrating its infrastructure, Wise seeks to extend its reach and accelerate the adoption of transparent and affordable cross-border payment solutions.