Last week, current and past employees of American Express confessed to secretly raising foreign exchange rates for small businesses.
According to the Wall Street Journal, these hikes date back to 2004, and was “widespread among the foreign exchange department.” Many argued that the motive behind this was boosting revenue, and in the case of the American Express employees, consistently reaching commission levels.
Unfortunately, and unsurprisingly, the practices targeted mostly small and medium sized businesses. As of July 31, American Express is conducting an external and internal investigation of their practices.
Small and medium-sized businesses have their own struggles when it comes to finding financial services that fit their unique needs. Stuck between the two major consumer markets that banks target, everyday customers and large corporations, small businesses often lack banking services that fit their specific needs.
And despite often needing specialized support, banks and financial institutions routinely target small businesses with hikes in fees and FX rates because they feel that they can.
Small business owners have a lot on their plate, from accounting to HR, and it’s likely that in some cases, a hidden FX markup might go under the radar. Because of this, some financial institutions feel that it’s necessary to take advantage of small business owners and their frantic, fast-paced lifestyle.
Before American Express, Wells Fargo was accused of similar pricing inflations.
This is a common thread in the financial industry, despite the seemingly wide ranging effects of recent scandals and issues. Small businesses are simply not respected enough by large financial organizations.
Business owners trust their banks and financial professionals to have their back, and to work in their best interests when they don’t have time to. Many business owners run most aspects of their company, and are forced to outsource certain operational and administrative tasks. Often, finances are the first to go.
This isn’t just an issue of foreign exchange pricing and fluctuation, it’s an issue of trust between banks and small businesses that has seemingly lingered for years.
Not only did American Express raise their rates above mid-market rate, they did so without informing their customers. Lack of transparency and an unwillingness to communicate with users is at the heart of these recurring issues.
Plus, the fact that employees at American Express and other financial institutions are incentivized to raise these hikes in an effort to reach their commission base doesn’t help the issue at hand.
This is one of the main reasons why we started Veem.
Despite small businesses’ tremendous value to our economy, they’re consistently taken advantage of by banks and other institutions with painful fees and delays that can cause costly disruptions for small business owners.
There needs to be a clear payment alternative for small businesses, one that specifically fits their needs and helps them achieve their goals.
Veem embraces the latest technology to ensure small businesses pay as efficiently and effectively as possible.
We take the dream of seamless payments that banks allegedly offer, and make it a reality.
A single missed payment can sink a small business. They need someone they can trust with their hard-earned money.
They need Veem.