UK SMEs with 20 transactions a month are overpaying £52,800 in international payment fees
New research from international payments service company Covercy reports that UK companies are vastly overpaying for cross-border payments, with some companies paying more than £4,000 per month in unnecessary fees.
More than 69% of the UK’s 53,000 SME exporters are paying completely unnecessary fees. For a company making 20 transactions of £10,000 this equates to £2,120 a month or £25,440 a year. Similarly, conducting 20 transactions of £1,000 this will total £1,100 a month or £13,200 a year.
HMRC has also released its monthly Overseas Trade Statistics report that reveals UK’s exports to EU countries increased by £1 billion in June 2016. However, in a post-Brexit world, UK exporters and importers will need to keep costs as low as possible as the UK seeks to open up new trade links. Reducing the cost of their international payments will be critical to this.
“While it may have expected that exports in particular might slow significantly down to the EU due to a potential ‘Brexit’, However, exports actually increased by over 8% compared to May. However, we’ve yet to see how Brexit has actually affected UK companies who export to the EU,” said Doron Cohen, CEO of Covercy
Covercy is trying to eliminate the hidden costs facing SMEs who make international money transfers and is licensed by the UK’s Financial Conduct Authority (FCA) as an Authorised Payment Institution. It recently closed a $2.5 million (£1.9 million) funding round led by Californian-based venture capital firmSGVC.
Covercy’s quoted rates are guaranteed through its own algorithm that means businesses know exactly how much their overseas transactions cost before committing to use the service. In addition, all cross-border transactions can be tracked and traced in real time by a business owner.