A new report by cross-border payments company Covercy finds that small businesses in the U.K. are grossly overpaying for their international transactions.
Reports on Tuesday (Aug. 16) said the firm found that thousands of dollars worth of unnecessary fees are paid by U.K. companies every month. Small and medium-sized businesses with just 20 $13,000 cross-border transactions a month pay an average of more than $2,700 a month in fees, researchers said.
For SMEs that average 20 transactions of just $1,300 a month, that yields more than $1,400 a month in fees, according to Covercy. The research was outlined through reports by Mob76 Outlook.
In a statement, Covercy CEO Doron Cohen said that, despite expectations that exports from the U.K. to Europe would slow following the Brexit vote, they actually increased 8 percent in June compared to May. The CEO added that it’s too early to tell exactly how U.K. businesses’ EU exports will be impacted by the vote.
In all, more than 69 percent of the U.K.’s 53,000 SME exporters are paying “completely unnecessary” cross-border payment fees, Covercy research found. Reports did not indicate what constituted an unnecessary fee, however.
The payments company recently closed a $2.5 million funding round led by SGVC, based in California, reports added.
Covercy’s report drew similar conclusions to earlier research conducted by Money Mover. Earlier this year, the company, along with consultancy firm Accourt, said SMEs are facing spiked cross-border payment fees in the U.K. from major banks; researchers uncovered nearly $5.8 billion in total hidden fees across Europe charged for cross-border transactions.
The report added that there is a lack of transparency in fee structures, meaning SME customers cannot easily decipher which bank may be better than another.