Sending money overseas
Shop around for the cheapest and fastest service
We found significant price differences across international money transfer suppliers.
Consumers often save if they send a large-value transaction through an international money transfer service.
We also found that banks are not the only secure option and do not always offer the fastest delivery.
Our research found that in some circumstances consumers could save up to AUD$500 on a USD$7000 transfer if they shopped around for a cheaper service.
Some services charge extra fees
Ask the supplier if:
- they deduct fees from the funds being transferred. These are often called correspondent banking fees
- the bank or supplier that receives the money charges a fee.
If the supplier deducts extra fees, ask them:
- to estimate the funds they will deliver to the recipient - some suppliers have an online tool to do this
- if the fees can be paid up-front, because this can sometimes save money.
Making purchases while travelling overseas
Choose the most appropriate payment method for the trip
There are 4 main things to consider when choosing a payment method for overseas travel:
- Acceptance – is the payment method commonly accepted in the overseas destination?
- Certainty of price – what the total price is going to be?
- Convenience – how easy is it to transport and use?
- Security – what happens if it gets lost or stolen?
Travel money cards can be more expensive
Travel money cards are one option when travelling overseas.
Fees connected with travel money cards can sometimes make them more expensive than other services. This includes fees for:
- buying a card in store
- ATM use
- inactivity and closure
- using the card for transactions in a currency that is not loaded on the card.
Our research found that if a travel money card holder with one of the big 4 banks withdrew the equivalent of AUD$100 in GBP from an overseas ATM in May 2019, and GBP was not pre-loaded onto the travel money card, they would be charged an ATM fee of around GBP$2 (about AUD$3.70) plus a 5.25% currency conversion fee.
The total fees for this transaction would be about AUD$8.90 or almost 9% of the transaction amount.
Debit and credit cards can be cheaper than travel money cards
It is cheaper to use a debit or credit card to make purchases while overseas than to use travel money cards.
It is even cheaper to use credit and debit cards that don’t charge international transaction fees.
Our research found if customers of the big 4 banks used a debit or credit card:
- without international transaction fees instead of a travel money card, they could save up to AUD$13 on a USD$200 purchase
- with international transaction fees instead of a travel money card, they could save up to AUD$5 on a USD$200 purchase.
Debit and credit cards have several other fees, such as annual fees and interest charges on credit cards.
It may also be more difficult to see the exchange rate when using a debit or credit card. It is easier when foreign currency is loaded onto a travel money card or buy foreign cash. Check the fees and the difference in retail exchange rates when choosing a card.
ASIC is responsible for regulating banks and financial service providers. See Loans and credit cards on the ASIC website for more information.
Choosing to pay in Australian dollars may be more expensive
Some merchants give the option of paying in Australian dollars or another currency when using a debit or credit card. This is referred to as ‘dynamic currency conversion’.
Choosing to pay in Australian dollars may be the more expensive option.
An overseas bank will usually add a margin or mark-up to the exchange rate when it handles the transaction and currency conversion.
The card issuer may still charge an international transaction fee if payment is made in Australian dollars, as the transaction occurred overseas.
Cards are not widely accepted in some overseas locations
Debit, credit and travel money cards are not accepted in some overseas locations and cash is essential to make purchases.
See Buying and converting foreign money.
Buying items from overseas suppliers
Consider an international transaction fee-free card
When buying an item overseas, an international transaction fee is generally charged. Fees are usually around 3% of the sale price.
If buying overseas items or travelling overseas, consider an international transaction fee-free credit or debit card. Make sure to compare fees and charges of different options.
Avoid international transaction fees
It is not always clear from a website that an international transaction fee applies.
Even if a website has a ‘.com.au’ domain name or lists prices in Australian dollars, it doesn't mean that the business will process the payment in Australia.
International transaction fees can be avoided when buying items from overseas suppliers by:
- checking if the transaction will be processed overseas or in Australia
- asking if the bank can block international transactions for certain payment cards.
Consumers can request a refund if they've been misled
It may be considered misleading under Australian Consumer Law if:
- consumers are charged an unexpected international transaction fee for a purchase in Australian dollars, and
- the business appeared to be in Australia.
Consumers should contact their card issuer, such as their bank or the international card scheme like Visa or Mastercard, to request a fee refund.
It may also be misleading if an overseas business indicates that a consumer will be charged in Australian dollars but then charges in a foreign currency. As a result, the consumer pays a higher price for the purchase than expected. The consumer may also be charged unexpected currency conversion fees. In this situation, the consumer should contact the business to request a partial refund. They can also contact their card issuer to request a fee refund.
ASIC is responsible for regulating banks and financial service providers. See Banking information on the ASIC website for more information.