Austin-based international money app Wise has launched new research that reveals the impact of hidden fees in financial transactions on U.S. and Texas-based small businesses. These fees, which are unexpected and either deliberately concealed or introduced at the very end of a transaction, serve as a ‘growth tax’ on local businesses, hindering their ability to expand and compete in a global marketplace.

In 2024, U.S. small businesses (SMBs) lost a staggering $153 billion annually to hidden fees in financial transactions according to the study, conducted in collaboration with The Centre for Economics and Business Research (Cebr). SMBs each pay an average of $4,400 per year on hidden fees — a figure that increases to $7,200 per year for SMBs that are required to make international payments to run their business.

How hidden fees impact Texas-based SMBs

Texas-based SMBs, including those right here in Austin, take a substantial hit on their own: they paid an estimated $11 billion in hidden fees for everyday financial transactions last year. The fees hitting Texan small businesses the hardest include credit card processing fees (47%), bank account fees (41%) and currency exchange fees (19%).

Another hidden fee taking a massive toll is international transfer fees (7%). In today’s world, businesses of all sizes have instant and digital access to global talent, suppliers, and customers. This means that operating internationally is no longer the exclusive domain of Fortune 500 companies. In fact, over half (57%) of Texas-based SMBs report being charged international transfer fees 1-2 per week, or over 100 times a year on average, making them a frequently recurring financial challenge that carries detrimental effects on these businesses.

All of these fees are taking a serious toll on the state’s small business owners. Half (50%) of Texas-based SMBs have operated at a loss monthly due to hidden fees, and 56% say running a business today is more chaotic than ever. Over three quarters (77%) find managing international finances more stressful and emotionally taxing than it used to be.

“As Austin businesses continue to navigate a changing economy, we appreciate our member Wise providing this research; it's important that businesses have quality information. Greater transparency would ensure local businesses can make informed decisions and thrive in our city," said Jeremy Martin, President & CEO of the Austin Chamber of Commerce.

To bring attention to the increasingly chaotic reality of running a small business in Texas, Wise unveiled a mural in East Austin on the corner of E 6th and Attayac St. on March 3. The mural features two takes of the same image, hero-ing one central figure – a small business owner named Tara.

On one side, this SMB owner appears overwhelmed as bills, invoices, international charges, currency exchanges and more flood her to-do list. On the flip side, Tara remains calm, cool and collected with the help of Wise Business. The mural mirrors the cost and complexity of international payments, and how Wise makes global financial management simple, transparent and low-cost for SMBs.

“Texas’ small businesses are the backbone of our state’s economy, but they’re being unnecessarily hit by hidden fees in financial transactions that are crucial to everyday operations,” said June Yuan, Wise Business Product Lead for North America. “Losing thousands of dollars a year to this ‘growth tax’ is not just an obstacle, it’s a crisis preventing SMBs from investing money to grow their businesses. We hope that this research alongside our mural downtown will help raise awareness for the hidden fee problem and let SMBs know that there are financial tools out there to help calm the chaos of running a small business.”

The long story short? It’s essential that SMBs gain access to more providers that offer transaction transparency instead of the predatory financial practices that so commonly prevent them from growing.

To read the full study, visit the Wise website here.