Best International Money Transfer Australia

Like other hot industries in Australia, such as unsecured small business loans, banks will not only compete on pricing, but on service too. All the banks surveyed offered very similar additional services such as online functionality, a wide range of destination countries and seamless integration with other services offered by the bank. All the banks strongly encourage new customers to open a bank account with the bank in order to cross-sell other services and reduce administrative functions such as repeat requests for proof of identity and other KYC details. To incentivise greater use of their own service as opposed to a rival bank, a variety of incentives are offered including better dealing spreads, lower transaction fees and insurance. The key point to remember for customers is they will get nothing unless they ask and negotiate. If a customer has an existing mortgage or current account with the bank, better transaction conditions are likely to be considered and accepted by any of the large banks. That’s why it is important to compare money transfer services and choose the one that offers the best rates.

Banks have vastly different operational objectives which mean they cannot possibly service the millions of their clients with dedicated customer support and personalised account managers. They also cannot offer preferential rates to all customers. Banks rely on the fact that customers with small transaction sizes will simply “avoid the hassle” of opening a new account with an alternative provider when the bank takes care of everything including insurance, directly from the customer’s standard bank account. This feature is what is known as the ‘default option’ for customers and banks, therefore, headline rates are normally fairly wide and profitable. For large corporate customers, conducting repeat transactions and forward transactions, banks offer a dazzling array of various perks and cost-saving features that aim to retain the larger volume business. For reasonably small one-off transactions such as $10,000, banks will not offer the best-rate. But if the transactions are the first of a series, the bank may consider waiving the transaction fee or reducing it for future deals. For large transfers or transfers done by small businesses, banks tend to provide a more engaged service which tends to be charged for as part of the company’s business account with the bank. Also, for large one-off transfers, banks will always be flexible with their advertised rates and all their transaction fees. The bottom line in FX, is that everything is negotiable — but there are expectations on both sides of the equation. Comparing international money transfer options beforehand is important.

Ultimately, some people will opt for boutique FX companies in the hope of obtaining better-dealing spreads and reducing transaction costs. FX companies are now famous for offering around 2%+ in savings on any transaction which can add up to a huge amount of money for anyone doing several currency transactions per year. To sign up with an FX company, Australian customers merely need a current ID and proof of address as part of the company’s account opening procedure. For businesses, a more detailed set of documentation is required including incorporation certificates and Director approval for account opening, in addition to the standard ID and address documents. Given the technology investment that dedicated FX companies have made , the entire process is done online and customers are able to open an account and initiate a currency transaction on the same day. Regulated currency companies are not permitted to hold client money, unless you have directed them to do so, which means they merely redirect or route the funds from the customer to the intermediary that will be doing the actual conversion (which is usually a bank). Currency companies are able to obtain much better rates from banks or other ‘liquidity providers’ than individuals because of aggregation and scale. By having a competitive rate for a large sum with a bank, currency companies can then pass on some of these savings to their customers. One last important note is that things are generally simple and straightforward in low-risk countries and major currencies such as the US and Aussie dollars, British pounds and Euros. But when it comes to exchanging Roubles, Brazilian Reals, South African Rand or Indian Rupees, there can be other important considerations including longer delivery times, higher bank charges at the destination country, greater KYC checks and most obviously, wider dealing spreads — although everything is negotiable.

A quick money transfer comparison check of the same $10,000 transfer to the UK — only via currency companies, shows the savings that are possible. Here is CurrencyFair’s best personal offer for April 5th 2022:

For $10,000 AUD you'll get £5,774 GBP

Editorial Rating 90%

• 0.4% Overall Markup Reported
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• Low Flat Fees
• Revolutionary P2P Marketplace

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2010

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Worldwide

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19

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£/€/$ 8

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• Ireland

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Compared to the best bank offer from NAB (£5,594), the best online offer we could find was CurrencyFair; offering £5,774, and thereby creating a saving of £180 or just over 3%. If we compare the worst bank offering to the money transfer service we get to a £285 or 4.9% saving. CurrencyFair was by no means the only ‘best offer’ FX company. Other names like Compass Markets, HiFX, TorFX and WorldFirst were all able to comfortably beat what banks had to offer, generating savings of ~4% each. If you are buying a house abroad for $250,000 – that’s a saving of $11,250. If you are going on holiday next week and taking $5,000 — that’s a saving of $225. The decision is yours. Note: If you are intending to do a currency transfer the other way — from the UK to Australia — the UK banks are similarly priced and conditioned as their Australian counterparts.

A commonwealth connection means the UK/Australia contain similar financial services regulations. Intriguingly, the UK’s five biggest banks; Barclays, HSBC, Lloyds, Natwest and RBS do not publish their personal FX rates in great detail on their websites, whereas Australian banks have dedicated platforms advising on both bid/ask prices and rate differences subject to transfer amount.