In spite of advances in technology, cross-border payments continue to present challenges for businesses globally as a result of hidden fees, a lack of transparency and inefficient processes, a recent study has revealed.

In the survey sponsored by Western Union and conducted by Proformative, a US online corporate finance community, 35 percent of respondents cited high fees and hidden transaction costs as their biggest challenge in making cross-border payments, while 28 percent cited currency volatility. Furthermore, only 40 percent of the respondents reported that their company has a formal foreign exchange (FX) risk management policy.

Moreover, the survey has found that companies are not selecting service providers based on criteria that allow them to most effectively manage cross-border payments and currency risks, with only 20 percent citing customer service or level of expertise as the main reason for choosing a partner in managing FX payments. Therefore, many businesses choose partners because they are in their existing bank group, on the basis of cost or use providers that have been used in the past.