Texas’ small businesses lost $167 million in 2023 — here’s why

Small businesses in the U.S. lost almost $800 million in hidden fees when sending money abroad in 2023 alone, with Texas small businesses losing a staggering $167 million — the highest of any individual state.

What this means: Deceptive practices from financial providers cause small businesses to lose out on being competitive in a global marketplace — and with limited awareness of the problem, it's difficult for SMBs to find a solution and create opportunities to grow.

Why it's important: Going global — and leveraging financial tools to manage money internationally — is a game-changer that provides greater returns on investments and new sources of revenue, both for businesses and the U.S. economy.

🔍 Take a closer look at the (hidden) problem

New data from global technology company Wise shows that 52% of Texas-based SMBs believe financial providers and banks are transparent about international payment costs. Unfortunately, that's not always the case.

Here's the deal: Hidden fees in international payments occur when a bank or financial provider adds a markup to the exchange rate.

• Banks and money transfer services use the mid-market rate, aka the midpoint of the prices bankers are willing to pay for a currency when they trade between themselves.
• But they rarely pass on that cost to their customers, instead showing an inflated exchange rate that includes hidden fees to make extra money. And this can happen even if your financial provider promises a 0% fee or no commission.

The impact:

• Research commissioned by Wise found that 47% of SMBs in Texas reported the complexity of international payment services prevents them from expanding their business.
• 34% would enter new markets if the costs of sending international payments were reduced.
• Plus, 1 in 10 U.S. businesses want to enter the global market over the next year but are prevented by complex international payment services, inflation, taxes and regulatory barriers.

And they're right to be concerned.

🤝 The solution: How to remove the barriers

Wise believes in money without borders.

• Because sending money should be as fast and easy as sending an email, Wise is helping empower people and businesses to send and manage money internationally — quickly, affordably, conveniently and transparently.

An expert take: Get the best deal on your transfers by always comparing providers' rates, whether or not it's Wise. (And the Wise team will tell you if you can do better).

How it's done: Search the currency conversion rate on a currency route and compare that rate against your bank's offer.

• If your financial provider presents a lower rate, there's a good chance a hidden fee is baked in.

Even better: Use Wise's currency converter to check the rate it would charge, plus see a transparent breakdown of fees.

Here's what else: Give Wise Business a shot to get an international business account that saves you money wherever you want to use it.

See how Wise works.