By Ceyda Erem, Mozo.com.au
Whether it’s your first or fourth time sending money overseas, chances are you’ll want to do it quick and easy, which for a lot of people, could mean a trip to the bank. But even though you’ll have convenience on your side and it makes sense to stick to what you know, is using a big bank for an international money transfer (IMT) the right choice?
Last year, Mozo research revealed that Australia pays some of the highest international money transfer costs in the world, thanks to hefty pricing by the big four banks. However the research also found that Aussies can save up to 4.7% on transfers, just by using an IMT specialist.
But how does an IMT specialist compare to the banks? Let’s consider…
The transfer fees
If there’s one thing that stings any wallet, it’s unnecessary fees and international money transfers are no exception. According to Mozo research, some banks charge between $10 to $30 per transfer, which if you’re planning on making multiple transfers can put a dint into your wallet. On the other hand, IMT specialists often charge low fat fees, or no fees at all, particularly if you’re happy to transfer online. For example, OrbitRemit does not charge a fee if you’re transferring funds under $10K – transfers over $10K will incur a $4 flat fee, or $2 if you’re transferring money to India.
Following the findings from the Australian Banking Royal Commission, many big banks may find themselves struggling to stay in their customer’s good books. In fact, a recent survey by ME Bank found that 94% of Aussies don’t trust their bank. In light of this, you’d think people would be more than happy to switch to a different provider, but when it comes to transferring money across borders there’s still some hesitancy to go outside of a bank.
But, just like banks, overseas money transfer specialists who operate in Australia are regulated by ASIC. In addition, online remitters have secure websites and apps with bank level encryption to ensure the safe transfer of your funds and allow you to track your money every step of the way. Plus you can usually read customer testimonials or reviews to help you come to a decision on whether you want to go with a particular provider.
While banks and IMT specialists both allow you to transfer money from one country to the other, you’ll generally find that there is a difference in the exchange rate that you’ll get between providers which is why it’s important to shop around. For instance, at the time of writing if I was to transfer AUD $5,000 into GBP, the average big four exchange rate would get converted to £2,556.16. On the other hand, if I used OrbitRemit I would get £2,668.13. That’s an extra £111 – I know whose pocket I’d prefer that money to be in!
From online deliveries to ripping off a bandaid, there are just some things we prefer done fast. But whether you opt for a remittance specialist or a big bank, these days there’s not a massive difference in transfer speed. Some IMT specialists offer same day or next day transfers for some destinations but money transfers typically take 2-5 business days.
Gone are the days of endless forms and stacks of paperwork, technology has come a long way in making sending money overseas easier than ever. These days, you can make transfers online or even through apps all at the click of a button. When comparing banks and IMT remittance specialists, it’s important to consider features like transfer tracking, account set up, access and phone service. Once you’re all set, a transfer could take only minutes to complete.
Ceyda Erem is a personal finance writer at financial comparison site mozo.com.au, where she shares tips and money saving hacks that help people live the life they want, without breaking the bank.