Scottish SMEs are spending an estimated 35% of their overheads on international payment fees when using traditional banks, according to a survey by fintech firm Wise.

The research by Wise claims that across Scotland, the average business spends £417,585 on international payment fees — higher than the North of England where the average is £414,068.

Wise said it was launched in 2011 “with the vision of making international money transfers cheap, fair, and simple.”  The firm is authorised by the UK’s Financial Conduct Authority.

Wise said the survey, conducted with 1,500 SMEs across the North of England and Scotland, focused on the struggles for smaller to medium sized enterprises when it comes to business expansions “given the hands they are dealt around international payment fees as a result of sending and receiving payments via traditional banks.”

Wise said: “It is therefore unsurprising to learn that almost a third (31%) of Scottish SMEs are put off from operating internationally, due to the high costs of international banking services.

“Given fraught international conditions when it comes to overseas banking, over a quarter of SMEs in Scotland (27%) claimed that exchange rate volatility had been one of their biggest challenges and a barrier to success over the last year.”

Wise senior product manager Jack Maddock said: “The data clearly outlines the hugely negative impact that sending and receiving money internationally via traditional banking methods is having on businesses based in Scotland.

“Whilst banks often profess their support and claim to champion SMEs, it’s clear to see this is a vanity project, and far outside of reality.

“With almost a quarter of SMEs (24%) surveyed planning to expand overseas within the next 12 months, it’s incredibly concerning to see the extent to which international banking fees are impacting their success and potential for growth.

“We need to ensure that more is done to support businesses in this situation.”