Published by Finance Monthly
New research from Covercy revealed the extent to which UK businesses have been paying well over the odds for international payments, hampering their abilities to expand in a post-Brexit world. Overall, traditional banks have a strangle hold of 95% of the business payments market and SMEs:
• For each transaction of £1,000 overpay £55
• For each transaction of £10,000 pay over £106 in needless fees
• For each transaction of £30,000 pay more than £220 in unnecessary charges
With over two-thirds (69%) of the UK’s 53,000 SME exporters making at least 20 transactions a month, paying over the odds for these transactions can really add up.
• One company making 20 transactions of £30,000 could overpay an average of £4,400 monthly or £52,800 a year in completely unnecessary fees
• For a company making 20 transactions of £10,000 this equates to £2,120 a month or £25,440 a year
• Meanwhile for a firm conducting 20 transactions of £1,000 this will total £1,100 a month or £13,200 a year
Meanwhile, importers have also been hit with unprecedented slides in the value of sterling due to Brexit (16% YoY against the dollar – £1/$1.31 and 18% YoY against the euro – £1/€1.18), while also facing these needless cross-border fees. However, companies like Covercy are seeking to change this unfair situation by saving UK SMEs up to 80% on international transfers. They do this by not charging intermediary charges, which can amount to £40 per transaction and also offering lower currency exchange rates (of 0.5% – 0.75% versus traditional banks’ rates of 3% – 6%).
All transactions can be completed within 24 hours, much speedier than banks. Covercy’s quoted rates are guaranteed through its own, unique algorithm, (unlike personal online exchange and remittance providers), meaning businesses know exactly how much their overseas transactions cost before committing to use the service…