If you’ve ever sent a hefty amount of money overseas via one of the big four banks, then chances are you’ve also been hit with hefty fees. But if you look beyond the big four, it is possible to get a better deal with specialist international money transfer services.
In fact, specialist IMT service InstaReM says that, according to a report carried out by the Australian Competition and Consumer Commission (ACCC), it’s “one of the most cost-effective money transfer service providers in Australia.”
The ACCC report reveals that Aussies lost a whopping $150 million in fees from 2017-2018 alone, sending USD and GBP via the big four banks.
Indeed, when it comes to sending money overseas, Australians might even be paying more than the rest of the world; the report showed that Aussies spent above the global average to send money overseas in Q2 of 2019.
The ACCC identified a number of specialist IMT services that offer cheaper prices for transferring money internationally, including specialist IMT service InstaReM. The report showed that InstaReM was the cheapest IMT service provider in Australia to send USD 200 overseas and the second best, after TransferWise, for sending USD 7,000 overseas.
The table below details the average costs to send USD 200 overseas from 6-12 February, 2019 with different IMT service providers.^
But despite other options such as InstaReM and TransferWise, Aussies continue to send their hard earned money overseas with the big four. And as the report found, the big four in turn consistently charge higher prices for international money transfer services.
As CEO of InstaReM Prajit Nanu said, “banks do not always offer the best exchange rates and often work with other banks, sometimes with several banks, to get the money across borders. This often results in inefficient and costly cross-border payments with high FX rates and hidden costs.”
So how does pricing work for international money transfers?
As the report explains, the cost of foreign exchange services is determined by the retail exchange rate and the actual transaction fee. The retail exchange rate includes a retail margin or mark-up; a whole lot of jargon which simply refers to the difference between the exchange rate your bank or FX provider purchases a currency at, and the exchange rate they sell it to you for.
The report found that some international money transfer options offered by the big banks take advantage of customers’ natural aversion to fees and instead earn money by putting high mark-ups on the retail exchange rate.
Specialist international money transfer services, such as InstaReM, aim to be more transparent when it comes to fees and exchange rates.
“We only charge a small transfer fee - fair and transparent - that typically varies from 0.25%-0.6% for our service. That’s all,” added Nanu.
If you do regularly send money overseas or you’re looking to send a large, one-off amount, why not head to Mozo’s international money transfer page to see a full list of other FX providers, you can even plug in the currency and the amount you want to send to compare exchange rates.
InstaReM offer zero margin FX rates* and lower overall fees for international money transfers. Transfers are fairly fast and easy, hence the “insta,” taking from 1-2 business days to reach the recipient. Plus you can even earn loyalty “InstaPoints” every time you transfer. With all these perks on offer, this specialist IMT service might just be worth checking out.