ACCC to take on foreign exchange services with new inquiry
The Australian Competition and Consumer Commission (ACCC) is expected to launch an inquiry into foreign currency conversion services.
The inquiry is set to look at why big banks and other major companies in Australia are able to consistently charge high prices to Aussie customers.
“The World Bank had reported that Australians sent around AU$8.8 billion overseas in 2016. Yet they also found that Australia is the third most expensive G20 country for consumers and small businesses to send money from,” said ACCC Chair, Rod Sims.
“This means that if you send AU$1000 overseas from Australia, on average you’ll pay AU$9 more than if you sent an equivalent amount from the United Kingdom, and AU$23 more than if you sent it from the United States. Given the amount of funds Australians remit, these higher charges can amount to hundreds of millions of dollars each year across the economy.”
One of the larger focuses for the ACCC will be to examine the way prices are presented to customers.
This decision has come in response to the Productivity Commission who found that many customers struggled to understand and compare the different types of prices charged for international money transfers, which is costing customers big time.
“The exchange rate you google is not the exchange rate you get from the big four banks. The difference is known as the ‘mark-up’, and it’s often a big part of the price consumers pay when converting currency,” said Sims.
“Many consumers have complained to the ACCC about these high mark-ups, as well as the transaction fees that often apply on top of that.”
Price is king for the younger generation
And as the ACCC is set to analyse the financial impact of confusing exchange rates, it appears that the move couldn’t have come a better time.
Mozo recently reported on the factors that mattered most to Aussies when it came to sending money overseas, with speed, safety and price coming out on top.
The research by IMT provider, WorldRemit, found that customers aged between 19-30 considered price for an international transfer as one of their top three most valued factors and were willing to scrap convenience for a cheaper transfer.
Currency conversion made easy
One of the other complaints made by Aussies was the difficulty they faced in being able to compare exchange rates from various providers.
Luckily, our international money transfer comparison tool can do just that - helping you easily compare exchange rates from a range of providers all in the one place.