The Ugly Truth About Payment Processing: How Banks Manipulate Exchange Rates and Engage in Bad Practices

3 min read


Payment processing is an essential part of any business that deals with customers around the world. But did you know that banks engage in unethical practices when it comes to processing payments? In this article, we’ll explore how banks manipulate exchange rates and engage in bad practices when processing payments.

What is Payment Processing and Why is it Important?

Payment processing involves the transfer of funds from a customer to a business in exchange for goods or services. It’s essential for businesses to offer various payment options to accommodate their customers’ preferences, and can banks play a significant role in processing these payments.

How Banks Manipulate Exchange Rates for Payment Processing

Banks use various tactics to manipulate exchange rates for payment processing, including:

  • Markup fees: Banks apply an additional fee to the exchange rate, making it more expensive for businesses and customers.
  • Rate manipulation: Banks manipulate exchange rates to their advantage by giving their customers a worse exchange rate than what they would get on the open market.
  • Hidden fees: Banks often hide fees in the exchange rate, making it difficult for businesses and customers to understand the true cost of the payment.
  • Delayed processing: Banks may delay payment processing to manipulate the exchange rate in their favor.


Bad Practices of Banks in Payment Processing

In addition to exchange rate manipulation, banks engage in several bad practices when processing payments, including:

  • Overcharging: Banks charge excessive fees and commissions on payment processing, eating into the businesses’ profits.
  • Non-transparent pricing: Banks do not disclose the full details of their pricing and execution methods, making it difficult for businesses to understand the true cost of payment processing.
  • Poor execution: Banks do not always process payments in a timely and efficient manner, leading to delays and potential financial losses for businesses.
  • Chargebacks: Banks often side with customers in chargeback disputes, leaving businesses to shoulder the burden of fraudulent chargebacks.
  • Lack of accountability: Banks are often not held accountable for their bad practices, as they have large legal teams and lobby to weaken regulations.


How Payment Processing Companies Can Do It Better

Using a payment processing company, like Veem, can help you take control back of your business payments, giving you the peace of mind you need to confidently pay your vendors.

So, how can we help?

  • End to end payment tracking: Use our real-time payment tracker to monitor your payments progress, and get notified of delays or errors.



  • Transparent pricing: With Veem, you always know exactly what to expect in terms of pricing. Any fees or foreign exchange that is associated with a payment will be clearly displayed to you during the time of creation. No surprises!
  • 24/7 Customer Support: If you ever have any questions about your payments, we have your back. Our world class support team is always happy and willing to help.
  • Secure: We have many security features in place to make sure that you, your account and your payments are protected. Trusted by over 700,000 users in 100 countries, Veems top priority is to deliver your funds securely and in a compliant manner.



Banks’ practices in payment processing are concerning and unethical, as they harm businesses and undermine the integrity of the payment processing system. As a business owner, it’s essential to be aware of these practices and choose a payment processor that will prioritize transparency and ethical behavior. By doing so, we can help promote a more trustworthy and reliable payment processing system. Read to let Veem help you with all your business payment needs? Get started today!



* This blog provides general information and discussion about global business payments and related subjects. The content provided in this blog ("Content”), should not be construed as and is not intended to constitute financial, legal or tax advice. You should seek the advice of professionals prior to acting upon any information contained in the Content. All Content is provided strictly “as is” and we make no warranty or representation of any kind regarding the Content.