Many Malaysians are unknowingly paying between RM200 and RM350 more on each overseas trip because of hidden exchange rate markups. This happens even when travellers spend hours comparing airfares, accommodation, and travel promotions in search of the best deals.

New research from international money app Wise shows that although 31% of Malaysian travellers believe they save more than RM500 by securing discounted offers, only 41% check the exchange rate when planning their trips. As a result, a RM2,500 weekend in Singapore can quietly become RM180 to RM250 more expensive. A RM5,000 holiday in Bangkok can rise by RM350 to RM450, and even a RM15 latte in Melbourne can increase to RM16.50 once conversion markups are applied.

How Hidden Markups Increase Trip Expenses

These added expenses come from exchange rate markups that do not appear clearly on receipts or checkout pages. Some financial service providers offer a rate that is 3% to 6% above the real mid-market rate, which is the midpoint between global buy and sell prices. The difference becomes a hidden fee that is absorbed into the conversion rather than itemised as an additional charge.

These markups can affect every part of a trip. Paying with an international card, booking hotels in foreign currencies, withdrawing cash overseas, or settling restaurant bills can all involve conversion costs. Many travellers only realise how much they have paid after reviewing their monthly statements once they return home.

Malaysians Often Focus On Price, Not The Exchange Rate

Wise Malaysia Country Manager Yen Ting Chiam notes that travellers tend to focus on promo codes, discounted flights, or headline prices, but overlook the exchange rate that ultimately determines how much they spend abroad. When the conversion rate is 3% to 6% worse than the mid-market rate, a RM3,000 holiday budget can quietly become RM3,300. This reduces purchasing power and affects how much travellers can actually afford to spend at their destination.

Why Exchange Rate Transparency Matters

The mid-market rate is widely recognised as the fairest exchange rate because it reflects the true value of a currency without any markup. This is the rate used in global financial markets and published by independent sources. When the rate offered to consumers is significantly above this level, the gap represents a hidden cost.

Transparent conversion practices help travellers make informed decisions before committing to a payment. Clearer rates also support better budgeting and reduce the risk of unexpected expenses during or after a trip. In Malaysia, foreign exchange and cross-border payment practices fall under the oversight of Bank Negara Malaysia, which promotes responsible conduct and transparency among financial institutions.

How Travellers Can Reduce Unnecessary Expenses

Travellers can reduce conversion costs by comparing the rate offered by a bank or card provider with the mid-market rate before confirming any payment. Even a small difference in the rate can accumulate across hotel bookings, transport payments, meals, or shopping.

Another important practice is declining dynamic currency conversion when paying overseas. This option asks whether the traveller wants to pay in Ringgit instead of the local currency. Although it appears convenient, the conversion rate used is often poorer, which results in a higher final amount. Paying in the local currency usually leads to a fairer rate.

Travellers can also keep track of their card fees by reviewing foreign transaction policies before their trip. Some cards add a fixed fee to every overseas purchase, while others apply a percentage-based markup. Understanding these charges helps travellers decide when to use their card and when to consider alternatives.

Overseas ATM withdrawals can have additional costs. Some banks charge withdrawal fees, while others apply a conversion markup on cash withdrawals. Travellers may benefit from checking whether their bank offers fee waivers or has partnerships with foreign ATM networks. Making fewer withdrawals in larger amounts may also reduce total fees.

Being aware of how exchange rates and fees are calculated is one of the most effective ways to avoid unnecessary expenses. By monitoring the rate, reviewing fees, and making informed choices during payment, travellers can keep their budgets on track and ensure more of their money goes toward their trip rather than hidden currency costs.

A Transparent Option For Managing Travel Money

Travellers who want clearer pricing can explore services that publish the mid-market exchange rate upfront and show all fees separately. These tools allow users to compare conversion costs before they pay, which helps reduce the likelihood of unexpected charges. Options that support multi-currency spending, rate alerts, or the ability to hold foreign currencies can also help travellers manage their budgets more accurately while abroad. 

Those who wish to compare different choices may find guides such as best travel cards in Malaysia useful when deciding which tools offer more transparent conversions.

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