With Australians said to be losing millions of dollars a year on their international money transfer (IMT) by not shopping around, changes are afoot to try and rectify the issue.
A 2019 report by the Australian Competition and Consumer Commission (ACCC) into foreign currency conversions, found a lack of transparent pricing in the IMT industry was causing many consumers to stick with the big four banks when sending money overseas, despite their poorer exchange rates and higher fees.
However, since the watchdog’s inquiry, a growing number of money transfer providers have taken strides to make it easier for customers to compare prices.
This week, the ACCC announced that over half of the 26 foreign currency exchange services reviewed in its inquiry have now either included an online calculator on site or improved their existing calculator.
These calculators are designed to help consumers figure out the total cost of their transfers, and according to ACCC Chair Rod Sims, they’re a step in the right direction.
“It’s even more important during the COVID-19 pandemic, and at a time of growing unemployment globally, that consumers are able to easily compare fees and other charges when converting currency and sending it to family or friends overseas,” Sims said.
“We do want to see all foreign currency service providers, not just some, lift their game so that consumers can benefit from greater price transparency and ultimately competition.”
Looking beyond the big banks
As with any financial decision, it pays to look at options beyond the traditional bank or credit union when making your international money transfer.
ACCC data shows that if you’re sending US$7,000 overseas, you could save over AU$500 by opting for the cheapest IMT supplier instead of the most expensive big four bank.
Mozo’s own number crunch reaffirms this point. For a AU$10,000 transfer, you could slash your money transfer bill by US$267, just by hopping onto the average IMT specialist exchange rate rather than the average big bank rate.^
So to get you started, here are a few alternative money transfer providers worth keeping an eye on.