Invest
Foreign currency a cash cow for the big 4
Confusing pricing and a lack of “robust” competition means Australians sending or spending money overseas are paying far more for foreign currency conversion services than is needed.
Foreign currency a cash cow for the big 4
Confusing pricing and a lack of “robust” competition means Australians sending or spending money overseas are paying far more for foreign currency conversion services than is needed.
The final report from the Australian Competition and Consumer Commission’s (ACCC) foreign currency conversion services inquiry found a number of issues affecting people who use international money transfers (IMTs), foreign cash, travel cards and credit cards or debit cards for transactions in foreign currencies.
Most scathingly, the ACCC blasted the sustained use of the big four banks for foreign currency conversion services due to some of the challenges facing consumers, despite the availability of much cheaper alternatives.
It is difficult for consumers to compare prices because some suppliers don’t disclose their total price upfront, it was reported, with consumers sometimes also paying unexpected fees.
According to the ACCC, during 2017-18, individual consumers using the big four to conduct IMTs in US dollars and British pounds alone could have collectively saved around $150 million through use of lower priced suppliers.
Commenting on the findings, ACCC chair Rod Sims also noted how “shopping around could save Australian consumers hundreds of millions of dollars each year”.
“Consumers and small businesses tend to default to their usual bank to send money overseas, but this may not be the cheapest option. This is another example where consumers may end up paying more for their loyalty,” he offered.
The ACCC had undertaken the inquiry after findings were made by the World Bank in June last year that the cost of sending money overseas from Australia was approximately 11 per cent higher than the G20 average, 13 per cent higher than the UK and almost 40 per cent higher than the US.
What the inquiry found:
- Foreign cash is more expensive at airports than at other locations. According to the ACCC, when buying US$200 in February 2019, consumers could have saved AU$40 by purchasing from the cheapest supplier at a non-airport location compared with the most expensive airport supplier.
- Consumers using the most expensive bank to transfer US$7,000 would have paid more than AU$500 more than they would have, had they gone straight to the cheapest supplier.
- Customers of the big four banks using debit or credit cards without international transaction fees instead of a travel money card could be saving up to AU$13 on a US$200 purchase.
- Customers of the big four banks could save up to AU$5 on a US$200 purchase by using a “regular” debit or credit card instead of a travel money card.
About the author
About the author
Spending
Toyota returns $18m in JobKeeper payments
An unexpected surge in sales in 2020 has inspired car manufacturer Toyota to write an $18 million check to the government, returning the amount it received in JobKeeper subsidies and touting the move...Read more
Spending
Aussies spend up big during pre-Christmas sales
Consumers have taken advantage of new freedoms post-lockdown and pre-Christmas discounts as retail sales soared in November, official figures have revealed. ...Read more
Spending
Aussies unlikely to splash the cash following pandemic
Australian consumers are likely to cut back on discretionary items in 2021 with many re-evaluating their spending habits following the COVID-19 pandemic, new research has revealed. ...Read more
Spending
‘It’s back’: SA unveils second Great State Voucher
South Australian residences or those planning to travel to the state could save up to $150 as the government continues its support for the local tourism sector. ...Read more
Spending
Rise in health premiums at 20-year low, but there’s a catch
While the Australian government’s health insurance reforms have resulted in the lowest annual average premium change since 2001, according to experts consumers could still see a “whacking” prem...Read more
Spending
Young Aussies pressured to buy love this Christmas
Younger Australians are likely to spend more this Christmas as they equate expensive gifts with love, a researcher has found. ...Read more
Spending
Buying local this Christmas could raise over $1bn for small business
New research suggests that Australians could deliver an estimated $1.12 billion to the small-business sector this Christmas just by buying one more gift from their favourite local business. ...Read more
Spending
WFH sees CBD pubs’ profits halve
Despite a lift in consumer spending, the easing of restrictions has not translated into a boom for the hospitality sectors in NSW and Victoria, a big four bank has revealed. ...Read more
Spending
Toyota returns $18m in JobKeeper payments
An unexpected surge in sales in 2020 has inspired car manufacturer Toyota to write an $18 million check to the government, returning the amount it received in JobKeeper subsidies and touting the move...Read more
Spending
Aussies spend up big during pre-Christmas sales
Consumers have taken advantage of new freedoms post-lockdown and pre-Christmas discounts as retail sales soared in November, official figures have revealed. ...Read more
Spending
Aussies unlikely to splash the cash following pandemic
Australian consumers are likely to cut back on discretionary items in 2021 with many re-evaluating their spending habits following the COVID-19 pandemic, new research has revealed. ...Read more
Spending
‘It’s back’: SA unveils second Great State Voucher
South Australian residences or those planning to travel to the state could save up to $150 as the government continues its support for the local tourism sector. ...Read more
Spending
Rise in health premiums at 20-year low, but there’s a catch
While the Australian government’s health insurance reforms have resulted in the lowest annual average premium change since 2001, according to experts consumers could still see a “whacking” prem...Read more
Spending
Young Aussies pressured to buy love this Christmas
Younger Australians are likely to spend more this Christmas as they equate expensive gifts with love, a researcher has found. ...Read more
Spending
Buying local this Christmas could raise over $1bn for small business
New research suggests that Australians could deliver an estimated $1.12 billion to the small-business sector this Christmas just by buying one more gift from their favourite local business. ...Read more
Spending
WFH sees CBD pubs’ profits halve
Despite a lift in consumer spending, the easing of restrictions has not translated into a boom for the hospitality sectors in NSW and Victoria, a big four bank has revealed. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
