Fair exchange: Transferwise launches ‘Borderless’ international money account for Australian businesses
Aussie businesses that rely on international money for importing and exporting goods and services are getting whacked with over a billion dollars in exchange rate markups and other fees, a new study has found.
The Capital Economics study, commissioned by International Money Transfer (IMT) Provider TransferWise, found that businesses paid a whopping $1.5 billion in markups and fees in 2016 alone, despite the fact that only $15 million worth of fees were advertised up front.
According to Taavet Hinrikus, Chairman and co-founder of TransferWise, traditional banks and some online players are making international business more difficult and costly for Australian firms.
“Business banking is notoriously expensive and difficult to set up and manage, even alternatives like PayPal are expensive for small businesses,” he said.
“It’s even worse when you’re doing business internationally: there are high fees and exchange rate mark-ups every time that a business is paid by a client or customer abroad, or when they organise their funds across country borders.”
In an effort to counter these expenses, TransferWise has announced the launch of its virtual ‘Borderless’ account which will allow Aussie business to make payments overseas as if they were a local business.
The account, which will be available to individuals in 2018, lets businesses and freelancers keep money in 27 different currencies - with exchanges requiring just a single transaction charge using a mid-market exchange rate.
RELATED: The travel money rip-off: Banks charging hundreds more to Aussie travellers
A similar study by Capital Economics on behalf of TransferWise found that regular Aussies were also being slugged on international money transfers - with travellers spending $1.1 billion exchanging currency in 2016 alone.
The good news is that both Australian businesses and travellers could be saving themselves the pain of excessive fees simply by comparing a range of top exchange rates. Head over to the Mozo international money transfer hub to get started.