Banks not always best

SENDING money overseas can mean both sender and recipient are stung with fees, research has revealed.

But an alternative transfer provider to your regular bank, can ensure your money goes further.

A Transferwise study of the foreign transfer fee policies of Aussie banks has found the big four all charge sending and receiving fees, adding between $23 and $45 in costs to transfers of more than $1000.

Transferwise spokesman Nick Lembo said banks were happy for customers to make these transfers “because they profit quite a lot when they do”.

He said, in addition to transfer fees, recipient bank fees and the exchange rate offered by a bank, there was also the intermediary bank fee.

“When your money travels from your bank to the recipient’s, it can pass through several ‘intermediary’ banks on its way,” Mr Lembo said.

“Each of these banks can charge its own fee, without telling you … the recipient will simply receive less money.”

Transferwise and other specialist providers Western Union and OrbitRemit do not charge receiver fees, and bypass intermediary banks. “For the majority of transactions, we process through a direct relationship with a receive side bank,” Western Union spokesman Simon Millard said.

OrbitRemit CEO Robbie Sampson said people often stick with their banks when making transfers, which could set them back as much as $50 extra for a single transfer.

This can all add up if they send money regularly.

“People often aren’t aware there is an alternative to the bank and when they do find these alternatives, are generally very happy,” he said.