Australian consumers and businesses have lost billions in hidden fees over the past decade. This has to stop.
Sending money abroad is a big deal for many Australians. You might be supporting your family, planning your next adventure, or expanding your business. But two-thirds of Australians are still unaware of what they're actually paying to send, spend, or receive money internationally and only 15% of Australians bother to even shop around for the best deal.
Why are we still paying so much for international payments? Providers often advertise "$0 fee" or "free" transfers, but then set their own inflated exchange rates and pocket the difference between their rate and the mid-market rate, the one you see on Google.
The state of transparency in Australia.
The Australian Competition and Consumer Commission (ACCC) has guidance requiring international money transfer providers to tell customers upfront how much a recipient will receive, but they don't have to say they are marking up the exchange rate.
This leaves consumers in the dark about what they are actually paying for their transfer unless they look at their statements, determine the retail rate they were charged, compare it to the mid-market rate at the time and then perform a series of arithmetic problems.
It shouldn’t be this difficult. The Australian government should change the rules to require companies to tell customers about all fees, including the fee in the retail mark up, so it’s easier for Aussies to send and spend money abroad knowing what they pay.
Last month, the world celebrated International Day of Family Remittances and a Coalition of 20 Multicultural Organisations and Fintechs wrote to the Australian Treasurer asking him to mandate price transparency for international payments, read the full letter.
Our region deserves better
Australia brings in thousands of migrant workers from the Pacific every year. They do difficult work and send their hard earned money back home to their families. Increasing the value of these remittances to the Pacific has been bipartisan policy for years with governments since 2011 seeking ways to increase the amounts sent home to families in the Pacific.
The best way to increase the value of these remittances is to have a competitive market with full price transparency so Pasifika can see who is the cheapest for sending their money.
The international community cares.
“One of the most important factors leading to high remittance prices is a lack of transparency in the market.” - The World Bank
Remittances are a lifeline to hundreds of millions of people around the world. The United Nations Sustainable Development Goal 10c aims to reduce the cost of remittances to less than 3% by 2030. The cost of sending remittances from Australia is 5.8%. This is why it's important to call on the Australian government to improve remittance price transparency in order to help reduce the cost of sending remittances and to help achieve the UN Sustainable Development Goal. Transparency is the only way that will enable people to compare costs, find better deals and put downwards pressure on prices.
At Wise, we believe in making finance fairer and putting an end to hidden fees. Unlike banks and other providers, we tell you exactly what your payments cost, no nasty surprises. Our campaign, "Nothing To Hide" aims to make hidden fees illegal, so you can know exactly how much you're being charged. Join the fight and help end hidden fees!