Aussie businesses delay international growth due to money transfer complexity, says Wise

Despite the Australian Competition and Consumer Commission’s (ACCC) asking for more transparency and simplicity in international money transfers (IMTs), a new report by foreign exchange specialists Wise (formerly known as Transfer Wise) says international payments are the most significant barrier to Australian small businesses when it comes to expanding internationally.

The research conducted by YouGov on behalf of Wise found that “over half (54%) of Australian businesses [that said] they had been put off by international expansion, were put off by the cost and complexity of international payments. ”

“Forty-one per cent of Australian small businesses that are already operating internationally said that the challenges of managing multiple currencies and bank accounts, as well as the high costs of international banking, had made it more difficult to operate abroad.”

Typically, the exchange rates that banks offer are not the same as those seen on Google or in daily news stories. That’s because banks and some IMT providers add extra fees, making it difficult to sometimes know how much money you’ll receive at the other end.

Related: The best international money transfer providers in 2021

While there are several bank-beating options for making overseas payments, many Australians still stick to traditional banks - which could lead to more costly money transfers.

“While it is exciting to see many ambitious businesses looking to flourish into other international markets, we can’t help but think of those being held back by an international banking system that works against them,” says Wise Australia’s country manager, Tristan Dakin.

According to the 4,800 businesses surveyed, high costs and a lack of transparency are top of mind. Wise research further showed that 78% of small business owners found “running an international business today is harder compared to five years ago,” due to these hurdles.

IMT tips for your business

International payments don’t have to be confusing, these are just a few things you need to keep in mind when sending money overseas:

• Set up rate alerts for your ideal exchange rate
  
• If exchange rates are good, consider a forward contract
  
• If exchange rates are poor, consider a limit order.
  
• Shop around! Check out our IMT comparison table to compare rates and fees.
  

If you are one of the many Australian small business owners confused by IMTs and FX, check out Mozo’s money transfer guides to better understand the world of currency exchange.