Wise urges New Zealand MPs to end NZD $667m FX fee losses

Wise has urged Parliament to address what it describes as misleading bank fees on foreign transactions, claiming these are costing New Zealanders hundreds of millions of New Zealand dollars each year.

The call was made as part of Wise's submission to Parliament's Finance and Expenditure Select Committee on the Financial Markets Conduct Amendment Bill 2025, which is currently under consideration. Wise contends that changes are needed to protect both consumers and businesses who are affected each time a currency conversion takes place, whether through sending money overseas, shopping online, travelling abroad, or operating businesses internationally.

Hidden costs

Research commissioned by Wise from Edgar, Dunn & Company indicated that New Zealanders lost a total of NZD $667 million to hidden foreign exchange (FX) payment fees in 2023. According to projections, this figure is set to increase to NZD $991 million by 2029 if current practices continue. Wise argues that these losses are primarily due to banks advertising "fee-free" international transactions while actual costs are concealed via inflated exchange rates.

Tristan Dakin, Country Manager ANZ at Wise, stated: "New Zealanders think they're getting a good deal because they see 'no fees' or 'zero commission'. But the real cost is hidden in the exchange rate mark-up, which can be vastly different to the rate you find on Google. By ensuring more transparency, parliament can put millions back into the wallets of consumers, while removing barriers for small businesses that want to expand internationally."

Regulatory context

New Zealand currently has no specific legal requirements in place to tackle the problem of hidden FX costs in cross-border banking and payments. However, Wise's submission follows growing discussions in both local and international contexts about the need to enhance competition and transparency. Last year, the New Zealand Commerce Commission noted there "appears to be room to improve competition" in this area, and the G20 is already working towards making international payments more affordable, faster, and more transparent worldwide.

Dakin also commented: "What the banks are doing right now is unfair, misleading, and is somehow perfectly legal. That needs to change, or they will continue to take an unfair share from Kiwi consumers and businesses. With the Financial Markets Conduct Amendment Bill 2025 and the growing international calls for reform, it's only a matter of time before governments all around the world take action on misleading FX fees."

He added: "New Zealand has an incredible opportunity to set an example for the rest of the world. These proposed reforms offer a practical, low-cost solution that would help Kiwis make better choices and save money, while driving competition and innovation in the space."

Proposed measures

Wise's submission recommends several changes be included in the Bill. First, they suggest that all banks and financial service providers should be required to display the full cost of a transfer upfront, showing both fixed fees and exchange rate mark-ups. Wise also calls for a ban on advertising that implies transfers are "fee-free" when costs are actually embedded in the exchange rate. It believes that standardising how prices are displayed would make it easier for consumers and businesses to compare service providers effectively, and that key terms like "mid-market exchange rate" should be clearly defined to maintain consistency across the sector.

The G20 has also cited the importance of enhancing cross-border payments, arguing that faster, cheaper, more transparent and more inclusive services would benefit citizens and economies worldwide by supporting economic growth, trade, development, and financial inclusion. Wise referenced this international perspective to highlight the relevance of its recommendations in the New Zealand context.

Committee consideration

The Financial Markets Conduct Amendment Bill 2025 remains before the Finance and Expenditure Select Committee, which is expected to report later in the year. Wise, supported by the data from its commissioned research, is urging policymakers to act in order to address what it sees as a lack of transparency and competition in cross-border payments.

The company's submission is part of a wider movement across several jurisdictions to regulate and clarify the costs of international money transfers and currency exchanges, amid projections of growing sums lost to hidden fees in the years ahead.