Wise PLC (LSE:WISE) chief executive Kriso Käärmann gave a sneak peek into January’s UK Hidden Fees Report, citing HSBC Holdings PLC (LSE:HSBA) as joint first with NatWest as the most expensive bank – and the least transparent – for foreign exchange transactions.
Käärmann disclosed the findings on Twitter/X after HSBC announced that it is set to launch Zing, a potential foreign exchange competitor for Wise.
According to data provided by Käärmann, who co-founded fintech disruptor Wise on a platform of democratising international money transfers, transferring £1,000 into euros through HSBC comes with a 3.7% markup “not communicated as a cost to the customer”.
Our January UK hidden fees report is yet to come out, but I can give you a sneak peak that HSBC is the most expensive bank and the least transparent (with Natwest) pic.twitter.com/HEa0v5Pu6X
— Kristo Käärmann (@kaarmann) January 2, 2024
HSBC touts a £0.00 cost, while baking these hidden fees into the HSBC exchange rate presented to the customer, alleges Käärmann.
Ah - you ask "where do they hide it"?
HSBC UK customers will find this screen familiar. pic.twitter.com/oKJGnOjlyc
— Kristo Käärmann (@kaarmann) January 2, 2024
The Zing app was not yet live at the time of writing, so it is unclear what HSBC’s new fee structure on the app looks like.
Wise charges as little as 43 basis points per international forex transaction due to its innovative use of domestic currency pools that make cross-border payments cheap and easy.
HSBC will struggle to compete with these prices.
“The new app will surely have real exchange rates with transparent pricing if they're serious about competing with Monzo, Starling or us,” said Käärmann, though he conceded that it “will be cool for HSBC customers - hoping for a massive price drop too, can't imagine launching with fees 700% higher than competition”.
Wise shares have dipped more than 6% since HSBC announced Zing earlier this week.