Hidden Costs in International Payments: The Overlooked Junk Fee Burning a Hole in Americans’ Pockets

“Junk fees” became a major buzzword in 2023 as the Biden Administration cracked down on hidden costs across industries to protect American consumers. Defined as “unnecessary, unavoidable, or surprise charges that inflate prices while adding little to no value,” these fees cost Americans billions.

While the focus has expanded from concert and airline fees to the financial sector, one significant "junk" fee remains overlooked: exchange rate markups in international payments and remittances.

The U.S., as the largest source of remittances worldwide, sees billions lost annually to hidden fees embedded in international payments. Providers often advertise “$0” or “no fees” while quietly inflating exchange rates. Research shows that in 2023 alone, Americans lost $5.8 billion due to exchange rate markups. Californians accounted for over $1 billion of these fees, while New Yorkers, Floridians, and Texans each lost more than $500 million.

At Wise, we have been fighting for transparency in international payments since our founding. We understand how damaging junk fees can be, which is why we launched a new report examining their impact—particularly in international transactions. The findings are clear: 81% of surveyed Americans consider hidden fees in currency exchanges (i.e., FX markups) to be junk fees. Cracking down on these hidden costs could save Americans billions.