(5 August 2024 – Australia) While improved transparency has lowered costs for Australian SMEs and individuals transferring funds overseas they are still missing out on over A$200 million in potential savings the ACCC reports.
The ACCC has been tracking developments in the market for international money transfers (IMTs) since a 2019 Inquiry into FX conversion services. IMT costs in Australia remain above the G20 targets of one per cent for IMTs to advanced economies and no more than three percent for remittances to emerging market economies by 2030.
East & Partners Australian Business FX service confirms that Banks continue to dominate the market for larger FX transfers of A$40,000 or more that are generally business or wholesale transactions.
The new ACCC report outlines how the growth in fintech businesses has reshaped the competitive landscape for IMTs. Fintechs have significantly grown their market share by offering cheaper prices and, sometimes, better service than the big banks. While the major banks have lowered prices in response to competitive pressure, the big four banks’ prices still remain higher than many of their rivals.
The increase in market shares for fintechs may not to be the result of churn away from the major incumbent banks, but instead overall volume growth generally. While customer churn remains exceptionally high for FX, the Big Four banks’ total FX volumes have remained relatively steady.
“We are pleased that the industry’s adoption of the ACCC’s Best Practice Guidance has led to improved transparency for consumers, unlocking savings for those choosing competitive offers to send money overseas. Significant savings are available when consumers shop around, use online FX calculators to compare prices, and switch providers accordingly” commented ACCC Chair Gina Cass-Gottlieb.
The ACCC invites IMT providers to submit feedback to the ACCC on their proposed changes to the best practice guidance. Please provide any comments on the proposed changes to FSCompetition@accc.gov.au by 5.00 pm AEST 21 August 2024.