The Australian Competition and Consumer Commission (ACCC) is to investigate the services provided to consumers sending money overseas and buying foreign currencies.
It has published an issues paper for public comment.
Chair of the ACCC, Rod Sims said foreign exchange services were used by Australians every day.
“The World Bank has reported that Australians sent around $8.8 billion overseas in 2016. Yet it also found that Australia is the third most expensive G20 country for consumers and small businesses to send money from,” Mr Sims said.
“This means that if you send $1,000 overseas from Australia, on average you’ll pay $9 more than if you sent an equivalent amount from the United Kingdom, and $23 more than if you sent it from the United States.”
He said that given the amount of funds Australians remit, these higher charges could amount to hundreds of millions of dollars each year across the economy.
“We will be examining why major companies in Australia, including the big four banks, seem to be able to consistently charge high prices,” Mr Sims said.
“The ACCC will examine price competition amongst suppliers of foreign currency conversion services and consider how easily potential entrants to the market can compete.”
He said at the core of the ACCC’s inquiry would be the way prices were presented to customers.
“The ACCC notes the Productivity Commission recently found that consumers struggled to understand and compare the different types of prices charged for international money transfers,” Mr Sims said.
“The exchange rate you Google is not the exchange rate you get from the big four banks. The difference is known as the ‘mark-up’, and it’s often a big part of the price consumers pay when converting currency.”
Public submissions on the matters raised in the ACCC’s issues paper will be accepted until 22 October.
The 16-page paper can be accessed at this PS News link.
