Don’t waste money in international transfers

MORE Aussies are sending money overseas than ever before, especially in the wake of natural disasters, but a lack of awareness has seen money that could do some good end up lost to transfer fees and costs.

Research from transfer company OrbitRemit revealed a spike in international monetary transfers by Australians after disasters.

Transfers to India rose 20 per cent after the 2017 flooding in Mumbai; while tropical Cyclone Tembin in the Philippines sparked a flow of cash accounting for 15 per cent of all money sent from Australia in the year. A 66 per cent increase in money was sent to Java in Indonesia in December after a 6.5 magnitude earthquake.

OrbitRemit CEO Robbie Sampson said the ability to send money quickly has helped those in need.

“You wouldn’t have dreamt a few years ago … Australians (could) send money as far as the Philippines or Indonesia in just a few hours,” Mr Sampson said.

“Thanks to evolving technology … we are seeing a real increase in money sent.”

A separate Finder.com.au study found 12 per cent of Australians provide financial assistance for relatives overseas and 32 per cent have sent money abroad at least once; 49 per cent as a gift and 37 per cent to support relatives.

World Bank statistics show Australian immigrants send $6.5 billion overseas each year, yet fewer than half know where to get the best exchange rate out of banks, Paypal or specialist transfer providers.

Finder.com.au spokeswoman Bessie Hassan said Australians who regularly send money overseas are unaware of potential savings.

“Too much money sent by Australians is not reaching the people it’s intended for because it’s diminished by fees,” she said, adding hundreds could be saved by knowing where to look when comparing options.

“Banks are notorious for charging costly foreign transfer fees as well as offering poor exchange rates, so check out some of the other options including online money transfer services.”

Mr Sampson said it was important to remain savvy, even in an emergency rush.

“Being aware of hidden costs and the fees from the service provider, and the receiving account, is paramount,” he said.

“Also, be aware of the exchange rate you’re getting when making the transfer. Most online money transfer services will have a currency exchange rate calculator available on their websites … a great way to compare services and ensure more money reaches the end destination.”

TransferWise’s online calculator shows the difference in price to send money can be significant and major banks are rarely cheapest.

Sending $2000 to India, for example, results in the recipient getting 99,207.30 Indian rupees with TransferWise, just ahead of 98,903.80 INR with Western Union. It is a sharp drop in value to Commonwealth Bank (95,074.31 INR) and ANZ (94,579.45 INR).

This can make a big difference in a Third World or developing country. TransferWise spokeswoman Anhar Khanbhai said more than one million Australians believe banks provide money transfers overseas for free.

“Not only do banks and currency brokers charge a fee for international money transfer, they also charge a margin and a mark-up on the exchange rate,” Ms Khanbhai said. “It’s unclear to the consumer just how much of a margin the bank is applying and how it was calculated.

“For example, on a $10,000 transfer to US$, customers can lose $380 in hidden fees and mark-up charged by the banks compared to (other services).”