Many small business owners realise the true impact of banking costs when FX and processing fees appear in monthly expense reports. These charges are often subtle and embedded in processes like foreign currency conversions, international payments and other routine account services. For business models with tight margins these invisible costs accumulate over time and reduce overall profitability.
This article explains where such fees typically arise, how to detect them, and the practical steps that UK SMEs can take to minimise their impact. It also highlights the advantage of multi-currency banking and transparent fee structures now offered by digital-first providers.
Understanding the Problem
Most hidden bank fees come from poor transparency: FX conversions, international transfers, account maintenance, and card payments. To avoid them, small businesses in the UK should:
- Compare fee structures across banks and digital providers.
- Use multi-currency accounts to avoid forced conversions.
- Review monthly statements for non-obvious charges.
- Negotiate or switch if fees are unclear or inflated.
- Leverage digital-first banking solutions with flat, transparent pricing.
At times (especially when not using digital-first banking platforms), it might not be that easy to track down the hidden fees and costs. They are small, recurring charges that go unnoticed until they build up. For example:
- An international transfer might include both a transfer fee and an undisclosed foreign exchange (FX) margin.
- A monthly account fee may be charged even when no premium services are used.
- A non-sterling transaction fee can be added to every overseas card payment.
A 2024 survey of UK SMEs by a financial insight group found that over 60% of small business owners could not accurately identify all the bank charges on their statements. The primary cause was a lack of visibility, not necessarily the size of the fees.
Types of Hidden Fees
Foreign Exchange (FX) Margins
When a payment is made or received in another currency, many banks automatically convert it to GBP. The rate applied often includes a markup of 1–3% over the mid-market rate, and this cost is rarely itemised.
Example: A payment of €10,000 might arrive as £8,440 instead of £8,500 due to a built-in FX margin. If the same funds are later sent in euros, the business faces another conversion - effectively paying twice.
International Transfer Fees
SWIFT payments can cost £15–£25 per transaction. Some banks also apply correspondent bank fees, deducted en route, which means the recipient receives less than the original amount.
Card Fees
Business cards often include:
- Non-sterling transaction fees (2–3%).
- ATM withdrawal charges when abroad.
- Hidden currency conversion fees layered onto the FX rate.
Account Maintenance Charges
Traditional business accounts may have a flat monthly fee (£5–£25), even if few additional services are used. These charges are often overlooked but can accumulate significantly over the year.
What Can Be Done About Hidden Bank Fees?
These problems with unwanted over-the-top fees aren’t inevitable. With a few targeted changes to how you move money, you can make costs visible, predictable and smaller. Below you will find five basic things that you need to take into account and think through at least once after opening your business bank account:
1. Select Transparent Providers
Choose banks or digital platforms that publish their FX margins and transfer costs clearly. Many digital-first accounts offer FX spreads as low as 0.35–0.55%, compared to the higher margins of legacy banks. Also, ensure that the FX fees are published or accessible through, for example, an AI assistant.
2. Use Multi-Currency Accounts
When you receive payments in different currencies like the British pound, euro, US Dollar, or Swiss francs, keeping separate accounts for prevents unnecessary conversions. If you receive payments in dollars, keeping them in USD means you can convert later when rates are favourable or spend them directly on USD-denominated expenses.
Importers and exporters benefit the most, because when constantly fluctuating rates are in their favour, locking-in currencies (i.e. keeping the received currency, instead of converting it automatically all the time) provides stability and avoids unexpected price shifts.
3. Review Bank Statements in Detail
Unfortunately, sometimes hidden fees will often be designed so that it is difficult to see them when doing just a superficial examination. Look for unexplained line items such as “service charges” or small percentage deductions. Comparing rates with real-time mid-market data can quickly reveal hidden margins.
4. Use Local Payment Networks
Whenever possible, use SEPA for euro payments or Faster Payments for GBP transfers. These methods are faster and less costly than SWIFT.
Example: A small manufacturing business switched from SWIFT to SEPA for euro transactions, can drop transfer costs down to €1 per payment (from around €20 often taking place with SWIFT)
5. Negotiate or Change Providers
If transparency remains lacking, consider switching to a new generation banking provider with published pricing. Consider Ampere - a digital-native bank, where transaction fees are all clearly visible in the apps dashboard (and there’s a nice breakdown for FX operations as well!)
Why Digital Banks Have an Advantage
Digital-first banks provide:
- Lower FX spreads without hidden mark-ups.
- Real-time visibility of every transaction fee.
- Integrated multi-currency balances, giving businesses control over when to convert funds.
Ampere, for instance, supports GBP, EUR, USD, and CHF as separate account balances. The FX margins are fixed at 0.35% for GBP/EUR and 0.55% for USD/CHF, ensuring that businesses always see the true cost of conversion.
Hidden fees aren’t inevitable—they’re a visibility problem. With the right setup, UK SMEs can route most payments through lower‑cost networks, avoid unnecessary conversions, and predict FX costs with confidence. Start with a short statement review, move eligible payments to Faster Payments or SEPA, and hold major currencies you use frequently. From there, commit to providers that publish clear pricing and show every fee before you confirm a transaction. If you’d like a partner that’s built around that level of transparency, Ampere can help.
