Transfer cash, but give the slug a miss
TAX MISTAKES: What the ATO is looking for INTERNATIONAL money transfers are growing in popularity as the world becomes a global village and online commerce booms, but also growing is the potential to get stung by unnecessary fees.
People wanting to transfer money may be hit with three tiers of costs – a sending fee, a poor exchange rate and a receiving fee – but there are cheaper options available. STUNG: Ray Ridgeway
Consumer group Choice said “exchange rates are where banks really kill you on overseas money transfers” and said the best interest rates and fees were offered by online money transfer businesses including OFX, World First, CurrencyFair and TransferWise.
Research by Mozo found that Australians could save hundreds of dollars by avoiding the big banks.
“The banks have had a monopoly on the market for a long time, so they haven’t needed to be competitive. But the fact is they don’t have a monopoly any longer,” Mozo director Kirsty Lamont said.
“We found that online money transfer providers are on average 5c cheaper per dollar transferred than the big four banks. When you’re transferring thousands of dollars, that difference adds up.”
Ms Lamont said people considering foreign currency transfers should always check the exchange rate, look beyond the big four banks and look out for extra fees or commissions.
“The money transfer market has clocked up strong growth in recent years, which can largely be attributed to globalisation and … people moving to foreign countries for work or study.”
World First managing director Ray Ridgeway said the triple- whammy of costs paid by some people was unnecessary.
“Banks say the receiving fee is out of their hands and they allow the receiving bank overseas to charge you $ US25 or 25 euros,” he said.
Mr Ridgeway said Australians were losing an average $ 705 on amounts of $ 20,000 when using a major bank.