An alternative to the banks for transferring currency internationally

By Ian Cragg, Co-founder, Send

In 2019 the ACCC made an enquiry into the supply of foreign currency conversion services (FX services) in Australia for both retail and SME clients.

The ACCC claimed that they found signs that recent competition from new entrants is delivering better consumer outcomes through lower prices and improved services.

The action that the ACCC recommended is important. FX services are significant to the Australian economy and the lives of individual Australians. Australian consumers purchase the equivalent of over AUD40 billion in foreign currency each year and further competition in the supply of FX services has the potential to deliver significant savings for consumers in relation to those purchases, which can range from the purchase and sale of real estate, UK pension transfers, a business paying an overseas supplier or an investor buying and selling overseas shares in GBP or USD on the FTSE, NYSE or NASDAQ.

Australian banks typically still provide FX rates that can be up to five per cent off of the interbank rate of exchange on major currencies, they can charge anything up to $50 per transaction and take up to five days to reach their destination, so individuals and businesses and are still often being hit with legacy technology, lengthy delays and a sub-standard level of customer service when trying to speak to somebody direct at a bank that is qualified in FX.

The ACCC estimated that during 2017–2018 individual consumers who used the big four banks to send an international money transfer in USD and GBP alone could have collectively saved about AUD150 million if they had instead used the lowest priced International Money Transfer (IMT) supplier.

Two years on, has much changed? From my view, not a lot.

When comparing exchange rates against the ‘Big 4’, the difference in their online FX retail rates compared to other IMT suppliers are a long way apart and it still goes to show how much revenue the banks generate for converting client funds internationally.

If we compare the cost of a AUD500,000 transaction to the USA (on 14/09/21), using one of the Big 4, you’d achieve a return of USD349,150 compared to USD366,430 using a FX specialist (so your client could be approximately AUD23,335 short using a bank in this instance).

Online currency conversion companies are not just entering the Australian market with better FX rates, they have real-time KYC decision making, third party API integrations, virtual bank accounts, increased payment rails, same day transactions and similar to our stockbroker members, a concierge style of personal service from their team in Australia who can discuss rates and requirements, as well as providing for their clients to have the ability to transfer FX online 24/7 via multi-currency payments platform.


Send is a IMT supplier. This article is general information and does not consider the circumstances of any investor or constitute advice.