JAKARTA - Wise, a global technology company, revealed that the Indonesian people lost around Rp. 15.09 trillion for foreign currency exchange fees (foreign currency) during 2022.
Of this amount, around Rp6.83 trillion is a cost hidden in the form of exchange rate markups, payments, and purchases using credit cards, and the remaining Rp8.26 trillion is a transaction fee.
Country Manager of Wise Indonesia, Elian Ciptono, said that most Indonesians actually know the two main costs for international transfers, namely upfront fees and exchange fees.
However, according to him, there are still many who do not know the actual cost of remittance, which currently reaches an average of 6.3 percent of the cost of inter-state remittances.
This means that the transfer of money worth US$1,000 or equivalent to Rp. 15 million to Indonesia is still charged 63 US dollars or around Rp. 1 million.
"Providers tend not to use the middle exchange rate and do not disclose the markup added to the exchange rate. As a result, consumers are not aware that they are subject to additional costs," said Elian quoting Antara, Wednesday, October 18.
Elian said that his party saw a significant decline in foreign currency service costs in recent years in Indonesia, from the previous IDR 21.47 trillion in 2018 to IDR 15.09 trillion in 2022.
"We see this as an evolution and trend across the industry towards better transparency that benefits all parties," said Elian.
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Furthermore, he explained that Indonesian workers (TKI) are community groups who are also affected by hidden costs.
In 2021, it was recorded that the countries with the highest number of migrant workers who sent the largest remittances to Indonesia, namely Saudi Arabia at 37.5 percent, Malaysia 25.2 percent, the United Arab Emirates at 7.5 percent, and Singapore at 4.1 percent.
These consumers were recorded to have paid IDR 7.61 trillion for transfer fees in 2022, including IDR 4.76 trillion for transaction fees and IDR 2.84 trillion for exchange rate markups.
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