UK businesses waste billions of pounds in additional foreign exchange fees on non-Sterling transactions when on business trips abroad each year, according to research from treasury and international payments specialist Centtrip.
In addition, their employees could also be losing out on as much as £51m annually by not including the currency conversion costs incurred when submitting their expenses.
Centtrip’s research found that almost half (47%) of businesses with employees travelling abroad ask workers to pick up the cost and claim the money back – with £1.7bn spent overseas by employees each year. Whether it is a corporate or personal credit card, using it abroad comes with a host of fees, such as charges on non-Sterling transactions of up to 3%, cash withdrawal fees and interest costs.
This exposes companies to often unnecessary and avoidable fees.
The survey revealed that on average firms spend approximately £106,000 on staff expenses in multiple currencies every year, which collectively could cost UK businesses nearly £3.7bn each year.
Of those businesses interviewed, only one in six (16%) had ever used prepaid cards – which eliminate ad hoc conversions as they already hold the required currency at the time of payment, presenting substantial savings to companies of all sizes.
Centtrip’s research also found that 53% of businesses are wasting substantial sums of money when using banks to make international payments, potentially costing them nearly £430m a year. With the survey pool representing just 0.7% of the UK’s businesses, these figures are likely to be just the tip of the iceberg.
Brian Jamieson, co-founder and CEO of Centtrip, said: “Companies and their employees sometimes may not realise how much money they may be wasting in unnecessary foreign exchange costs while on business abroad. These sums are too big to ignore.”
“From expecting employees to pay from their own pocket to defaulting to using traditional ways of making payments and exchanging currencies, businesses and their employees foot substantial credit card bills each year. But they can easily avoid these by shopping around for better, smarter and more cost-efficient options.”