Sending money overseas
Shop around for the cheapest and fastest service using foreign exchange calculators
Compare supplier prices using foreign exchange rate calculators. This is the best way to find out who offers the best value deal for a consumer’s transaction.
Suppliers who do not have an foreign exchange rate calculator aren’t following the
ACCC Best Practice Guidance for IMT transparency.
We found significant price differences across international money transfer suppliers.
Consumers should consider using non-bank suppliers as they are often better priced, and consumers can save. The more consumers that are willing to switch the more likely prices will continue to fall.
Based on the average transaction of $3,138 for a big four bank international money transfer, consumers could each save approximately $108 if they shopped around for a cheaper supplier.
Look at the total price and the amount the recipient will receive
Total price and the amount received is the best representation of value for money when comparing suppliers.
Comparing the amount that will be received also limits any tricky calculations that consumer needs to make to account for fees and foreign exchange margins.
Learn how suppliers charge you using fees and foreign exchange margins
Suppliers who advertise as fee-free may still charge a margin on the exchange rate. It is often hidden and sometimes negotiable or it changes based on how much is being transferred.
Consider if other fees will be charged which aren’t a supplier’s own fees. Ask the supplier if:
- the bank will deduct fees from the funds being transferred (known as correspondent banking fees)
- the bank or supplier that receives the money charges a fee (known as recipient bank fees). If the supplier deducts extra fees, ask them:
- to estimate the funds they will deliver to the recipient if the supplier will absorb these fees, and/or
- refund you any fees incurred.
Know the best time to transfer
If you can wait, timing may impact the value for money you get. Currency markets can change, and high value transactions can be impacted by the time of year or even whether you make a transfer on a weekday or weekend. Currency markets close for the weekend and some suppliers can charge an extra fee or may charge a worse value exchange rate over the weekend to mitigate for any possible movement in the market.
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.
If you operate a business and process payments outside of Australia, you should alert your customers before entering into a transaction with them if they are likely to be charged international transaction fees. This could be as simple as:
- including a prominent statement during an online order process (but prior to taking payment)
- informing your customers of the country the payments will be processed
- directing consumers to contact their financial institution to check whether international transaction fees will apply to their purchase.
You can find this information in our Best Practice Guidance: Disclosure of international transaction fees.
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.