As anyone with loved ones overseas can attest to, spending Christmas away from family is tough. But with travel bans and border closures still in place, that may be the reality for many Australians this year. Still, there’s no need to hit ‘cancel’ on celebrations just yet. Besides navigating time zones to Skype call your nan or sister on Christmas Day, if you’re looking to treat your loved ones to something extra special this festive season, cash is a popular gift option. Given the convenience, speed and low cost of international money transfers, it’s little surprise that they’ve become an attractive avenue for migrants looking to support - or in this case, pleasantly surprise - family back home. In fact, in 2019, Australians sent a whopping $7.44 billion across the globe according to the World Bank. But before you send off your first batch of cash, it’s worth doing your research on things like how to pick the right provider for your transfer and the biggest traps you’ll want to avoid. To keep you in the know, we’ve answered some of the burning questions you might have about Christmas money transfers below.
Exchange rates are looking favourable for Australians sending money overseas as the Aussie dollar rose off the back of US election results. Right now, the AUD is trading just below 73 US cents, according to the XE Currency Converter - up from around 71 US cents at the start of election week. This is the first time since mid-September that the currency has broken past 72.5 US cents. While the gap between US$0.71 and US$0.73 seems almost negligible, for larger international money transfers (IMT), this could be a difference of hundreds of dollars.IMT provider OFX’s senior corporate manager, Matt Richardson said Joe Biden winning the presidency boosted the market appetite for risk (known as ‘risk on’ sentiment). As a result, investors flocked to purchase stocks and high-yield currencies like the AUD, raising the value of these riskier assets. “The democrat led government is expected to implement significant Coronavirus relief programs and alleviate tensions with key global allies, creating a ‘risk on’ environment across financial markets,” Richardson said. “The Australian dollar has advanced against a basket of major counterparts in the midst of [this] ‘risk on’ move, creating an opportune time for those settling costs overseas to reduce the AUD expenditure or maximise their foreign currency return.“Conversely those sending funds back down under [would] suffer a higher cost or smaller return on the back to the AUD appreciation.” In other words, bigger savings are now on the table for individuals and businesses sending funds from Australia to countries like the US and the UK, thanks to stronger AUD/USD and AUD/GBP exchange rates. But you may lose out if instead you’re moving money from the US and UK to Australia.
Using your existing bank for international money transfers might seem like the simplest and most convenient option, but did you know that using a specialist transfer provider can make the process more streamlined and considerably more cost-effective?
With Christmas just around the corner, SendFX is giving out a special treat to Australians sending money overseas.For a limited time, if you register a free account with SendFX and make transfers over AU$1,000, you could be rewarded with a $100 EFTPOS gift card. This offer began on 31 October and will run for two months until the end of December. Once you’ve made your first transfer, the gift card should arrive in 30 days or less, allowing you to redeem $100 in credit at any checkout that accepts EFTPOS. Mozo Director Kirsty Lamont said for the one third of Aussies born overseas, international money transfers (IMT) have always a way to send income and support family back home, but this Christmas, they could also be a way to stay connected.“Christmas reunions won’t be the same this year as travel bans and social distancing measures keep us separated from loved ones overseas. That’s why cash gifts are such a savvy way around all those restrictions - they keep the tradition of exchanging presents on Christmas Day alive, plus they’re a lot more practical and welcome at a time when many are still struggling financially,” she said.
Sending money overseas just got even more competitive, with TransferWise announcing a series of price cuts this week for Australians transferring money to Asia. TransferWise Australia users can now save up to 23% in fees when moving funds to 10 different Asian countries, including China, India and Thailand.The exact savings will depend on the destination and amount sent. For instance, AUD 1,000 transfers to China cost 13% less than before, which means you would pay $13.11 instead of $14.95. Meanwhile, the cost of sending AUD 1,000 to Sri Lanka has fallen by a much larger 23%, reducing the fee from $9.72 to $7.52.Below is a full breakdown of TransferWise’s fee reductions:
Digital payments platform Azimo has become the latest international money transfer fintech to set up shop in Australia, joining the IMT scene today with a promise to deliver competitive exchange rates and fast speeds to customers. The UK-based service has operated in Europe since 2012, and now eight years on, it's set its sights on Australia as its next large sending market. “We’ve always been more interested in the Asia Pacific than the US,” Azimo’s chief operating officer, Dora Ziambra says. “Australia is also an English speaking country where there’s less localisation needed [than other Asian Pacific countries], and it’s a place where 30% of the population is foreign born and has connections to another country. So it lends itself as a next step of international expansion.”And with AU$28 billion remittances sent abroad from Australia every year, Ziambra says “there’s still room for Azimo to offer a competitive product.”She says Azimo stands out from other digital players in terms of the breadth of its network and its wide range of payout methods. “We cover a lot more countries … and [in addition to bank-to-bank transfers] we offer cash payout, mobile wallet, mobile top-up, sending credit to phone, home delivery in some cases, and bank deposits.” Customers are able to send money to more than 200 countries and territories, including China, Vietnam, the Philippines and Thailand. And while large IMTs with many other providers can take between one to five working days to process, Azimo says most of its transfers arrive in less than 24 hours. Instant transfers are also available for over 50 countries, depending on which payout method you choose. For example, while sending funds to a Thailand bank account would be instant (i.e. complete in a few minutes), for transfers to the Philippines to occur immediately, you may need to opt for a cash pickup instead.Azimo is also expected to appeal to Australia’s Chinese expat community, with instant transfers available thanks to Azimo’s integration with Alipay, a major online payments platform in China. All the customer will need is their recipient’s AliPay ID to send money instantly in yuan. “Delivery speed is something we keep investing in,” Ziambra says. “A lot of our customers - as many as 75% - send money for family support, so getting the money there as quickly as possible at the best price possible is what we aim to offer.”
Need to send money overseas to loved ones? Or needing to set up regular international payments for your small business? You may already know that the big four banks all offer International Money Transfer services, but it’s not always as simple as walking into a branch.
The Australian dollar (AUD) has been anything but stable over the past few weeks, fluctuating constantly between 70.5 and 72 US cents. While this may not seem like much variation, for a larger international money transfer of AU$100,000, it could mean saving or losing as much as US$1,500.And that volatility is only set to intensify throughout October. According to foreign exchange specialist OFX’s head of treasury, Sebastian Schinkel, the Aussie dollar could be knocked out of its current trading range as major global events like the deadline for Brexit and the US election loom on the horizon.“There are a lot of things brewing in the background that may help the Aussie move away from that range. But it’s hard to tell which way we’re going because there are so many factors at play,” he said. “Firstly a lot of attention is being put on the US election, and depending on what happens there, we should definitely see a move in the Aussie. We also have the same thing happening with Brexit in the next couple of weeks or months, and then whatever happens with COVID-19 and US-China trade tensions [will also have an impact on the Aussie].”Plus, uncertainty lingers around Australia’s economic position going forward - the AUD could go up or down in value, depending on whether or not fiscal support announced in the recent Budget will help the economy recover. “I think the Federal Budget will help cover the reduction in JobKeeper and JobSeeker [payments], but at the end of the day, the main challenge for the government and for the country is confidence. There’s a lot of offer for credit but what we are lacking is people actually demanding that credit because they’re afraid of making investments,” Schinkel said. A negative risk sentiment would typically cause investors to flee toward ‘safe haven’ currencies like the US dollar (USD), Japanese Yen (JYP) and Swiss Franc (CHF), which would then weaken the Aussie dollar. That’s precisely why the AUD crashed to 55 US cents back in March after COVID-19 was declared a pandemic. Meanwhile, a positive risk sentiment would likely do the opposite, boosting the value of ‘risky’ currencies like the Aussie dollar and Canadian dollar (CAD).
With faster international money transfers becoming even more of an essential during COVID-19, PayPal and Visa have stepped in with a payments option that could reduce your wait time from days down to minutes.