Press Release

For immediate release

Information verified correct on December 8th, 2016

Australia ranks 10th in the world for international money transfers: don’t get ripped off when transferring cash!

March 18, 2015, Sydney, Australia – Many Australians who transfer money overseas could be paying up to three-times more in fees by not comparing banks with other providers, according to one of Australia's biggest comparison websites finder.com.au.

An analysis of the international money transfer market by finder.com.au, which compares IMT providers, found that more people are sending money overseas from Australia than ever before, with record outgoings recorded over the past four years.

Australia ranks 10th highest in the world for transferring money overseas, with about US$15 billion (A$17 billion) transferred in 2012 – 11 percent more than in 2010, according to World Bank data analysed by finder.com.au.

In 2009, Australia was ranked number 26 in the top remittance sending countries according to the World Bank.

A total of US$528.7 billion (A$694.2 billion) was transferred worldwide in 2012, with the United States in the number one spot, transferring US$123 billion (A$161.5 billion).

Top 10 countries with highest international money transfers and their remittance total ($US Million)

  • United States: $123,273
  • Saudi Arabia: $27,645
  • Canada: $23,909
  • United Kingdom: $23,601
  • Germany: $21,031
  • United Arab Emirates: $20,347
  • French Polynesia: $19,283
  • Spain: $18,595
  • Hong Kong: $17,110
  • Australia: $15,049

Michelle Hutchison, Money Expert at finder.com.au said with more people sending money overseas than ever before, finding the best deal has never been more important.

“International money transfers have skyrocketed in Australia and it’s set to continue with more money being transferred and more people searching for money transfer options than ever before.

"We've seen triple the number of Australians searching for international money transfers on Google in one month compared to the same time last year. There were about 156,000 Google searches by Australians looking to transfer money internationally in the past year, with over 13,000 searches every month on average.

“More than one in four people in Australia were born overseas (6.4 million people or 28 percent), which shows it’s an industry that’s likely to continue growing as awareness builds for the importance of fast access to international remittance services to support their families offshore.

“With the growing demand for sending money overseas and more providers with different rates and fees charged, we have launched a comparison of international money transfer providers to help people understand their options and save money on international money transfers.”

Half of these money transfers are going to recipients in just five countries: United Kingdom, China, India, Lebanon and Vietnam. Recipients in the UK received US$2.15 billion (A$2.8 billion) from Australia, followed by China with US$2.11 billion (A$2.8 billion) and India of US$1.34 billion (A$1.8 billion).

Top 10 countries Australians send money to (US$ Million)

  • United Kingdom: $2,152
  • China: $2,107
  • India: $1,338
  • Lebanon: $1,085
  • Vietnam: $881
  • Philippines: $862
  • New Zealand: $689
  • Germany: $506
  • Italy: $490
  • Korea: $382

“Too much money sent by Australians is not reaching the people on the receiving end because it is diminished by fees.

“In fact, our research shows that it can be three times cheaper to transfer money overseas through a broker compared to a bank, with some brokers having next to no fees for recurring customers. This is why it is so important to compare.”

There are three main elements that make up the total cost to the consumer of a remittance transaction:

  1. The fee charged at the time of transfer by the sending service provider (broker/bank)
  2. Fees charged at the time of disbursement by the service provider in the recipient country (receiving fees)
  3. The exchange rate applied to the transaction (margin).

Research by finder.com.au revealed the cost of sending US$1,000 to the UK ranged from $0 to $18.20. This is the fee charged by the provider. In some cases there may be intermediary bank charges from the receiving bank overseas. And the cost of converting funds into US dollars generally incurs an intermediary charge of between US$20-30 as an example.

According to finder.com.au research, banks generally take 3-5 percent margin off the interbank rate (the rate that the banks buy their currency from each other) whereas brokers tend to take under 3 percent.

“Brokers generally don't offset their exchange rates with the lower commissions they charge. It's generally the case that the smaller brokers are able to offer lower fees and rates because they have access to better deals as they have higher volumes of transactions than other banks, they specialise in it and some even do peer-to-peer which gives them access to a potentially cheaper method of transfer.

“The drawback is it's a relatively new market and non-bank providers are less likely to have their security kinks ironed out compared to big banks. If you pay more when going with a bank it's because you're paying for the security of a trusted brand.

“However, this sort of competition between providers is a previously untapped opportunity to improve costs and services to consumers.”

List of fees that people need to watch out for according to finder.com.au:

  • Fees are usually charged per transfer and will range between providers, and will also generally be more expensive inside a branch.
  • There are three main elements to the cost of transferring money overseas:
    • the fee charged at the time of the transfer;
    • the fee charged at the time of disbursement by the service provider in the recipient country (receiving fees); and
    • the exchange rate applied to the transaction.
    • the fee charged at the time of disbursement by the service provider in the recipient country (receiving fees); and
    • the exchange rate applied to the transaction.
  • Fees can also be charged for cancelling or amending a transaction.
  • If you want to investigate a transaction you'll probably be charged a fee too.
  • Exchange rates can also vary and cost a lot more than necessary if you don't shop around.

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For further information

Disclaimer

The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on finder.com.au's review pages for the current correct values.

About finder.com.au:

finder.com.au is one of Australia’s biggest comparison websites and has helped over 4.8 million Australians find better credit cards, home loans, life insurance, shopping deals and more since 2006. finder.com.au compares 250 credit and debit cards from 31 providers, over 300 home loan products, and information from 13 life insurance providers as well as online shopping promo codes, mobile phone plans, travel insurance and more. One Australian every five minutes is using finder.com.au or creditcardfinder.com.au to find better (Source: Google Analytics).

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