Those of you who send money to friends or relatives overseas may find out by the end of this article that you have been paying through your nose to get the money to them. By this I mean that you could have been paying hundreds of dollars extra when you didn’t really have to. This is the latest information that is coming from comparison website Mozo.
According to the World Bank, Australia is one of the more developed countries in the world with the highest expenses related to sending money overseas. There are only a handful of countries which have slightly higher transfer costs, including Japan and South Africa. Compare Australian to the UK, USA or Canada though and we are paying considerably more. Save money the next time you tranfer money abroad by avoiding what has been considered one of Australia’s biggest rip-offs.
There is no doubt that due to the controversy surrounding the sending of money abroad from within Australia, that the sector is ripe for disruption. The big four banks have been getting away with unnecessarily high charges for too long while Mozo’s analysis has found that online money transfer specialists are actually charging as much as 5.2% less. Using one of these online platforms means that Australians can save as much as $500 on a transfer of $10,000 into Euros, US Dollars or Great British Pounds.
What’s even worse for the banks is the fact that their turnaround time is slower than other online providers. The big four will have the money transferred in up to 5 days whilst specialist money transfer companies can do it within one or two days.
Mozo conducted a research project to understand the market place better. They began by comparing the cost of transferring $10,000 into US Dollars, Pound Sterling and Euros and then the cost of transferring GBP10,000, US$10,000 and EUR10,000 into Australian dollars. In all transactions both fees and exchange rates were taken into consideration.
Compare the cost of using these online providers with that of the big four banks and the story is quite different. If you were to transfer $10,000 into US dollars via the big four you will net US$7,273 and it will take up to 5 days. The online providers as mentioned above would give you a net US$7,661 (or a saving of $511).
Transfer the same amount into Great British pounds with the online providers and you will save GBP288 or $540. The situation is the same with Euros, saving you EUR373 or $559 in total.
Spin things the other way round and transfer US$ 10,000 into Australian dollars and you can save $688 simply by avoiding the big four banks. Send EUR 10,000 and you could save even more money on bank charges because the net savings would equate to a whopping $860. When sending Great British Pounds, this transfer stole offering the biggest saving of all (i.e. a transfer of GBP 10,000 resulted in savings of $1,051!).
If you are fed up with paying incredibly high bank charges for no apparent reason then using a cheaper online providers is one of the best ways to save money instantly. The World Bank also released figures from the beginning of 2016 stating that Australians are paying on average 9.5% in bank fees on transfers from as little as $200. By comparison, the average among the remaining G20 countries sits at around 7.61% in charges.
Buckscoop Tips for Transferring Money Abroad
1) Begin by comparing the exchange rates that each provider is giving you to see who has more favourable rates. This will determine how much foreign currency you will receive. Even a few cents can make all the difference on a large sum of money.
2) Always check the speed of transfer, that is the time it takes for the money to actually arrive in the destination you are sending to. The market average time is five days; so see if the providers that offer a shorter transfer time are charging you extra.
3) Fees should always be checked and if they are not clear then either ask them to be explained or pick a different provider who is easier to understand. Most banks and agencies will charge extra fees for exchanging your money. Certain places will have fixed fees whilst others will charge a percentage of the total money exchanged.
4) Limits may also exist with certain suppliers either on the amounts you can send or the amount of times you can send money per month , so be sure to research this if you plan to use the service repetitively.