New research reveals that UK businesses may be wasting billions of pounds in additional foreign exchange fees on non-Sterling transactions during work trips abroad.
Treasury and international payments specialist Centtrip says employees could also be losing out on as much as £51 million annually by not including currency conversion costs incurred when submitting their expenses.
Centtrip’s research found nearly half (47 per cent) of businesses ask employees to pick up the cost and claim the money back when travelling abroad, with £1.7 billion spent overseas every year.
However, both personal and corporate credit cards come with fees on foreign transactions, such as charges of up to 3 per cent on non-Sterling cash withdrawals and interest costs. Centtrip says this exposes businesses to “often unnecessary and avoidable fees”.
The survey revealed that firms spend an average of £106,000 a year in multiple currencies on staff expenses, potentially costing a collective £3.7 billion extra in exchange fees.
Of the companies polled, only 16 per cent had ever used pre-paid cards, which Centtrip says eliminate ad hoc conversions as the cards hold the required currency at the time of the payment, therefore providing savings on exchange fees.
Furthermore, more than half (53 per cent) of businesses surveyed use banks to make international payments, potentially costing them an extra £430 million a year.
Centtrip says that with its survey representing just 0.7 per cent of UK businesses, the figures revealed are likely to only be “the tip of the iceberg”.
Brian Jamieson, co-founder and CEO of Centtrip, commented: “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 using traditional ways of making payments and exchange 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.”