The ACCC issued its best practice guidance for money transfer providers in 2019, which included greater transparency over pricing. Though the guidance is voluntary, major providers comply, and that has helped drive costs down, including among the big banks.

However, the ACCC says prices at the big four remain higher than at many of their rivals. It gives an example of a person using the most expensive bank in February this year to transfer $10,000 to US currency. More than $400 could have been saved if the person had chosen from among the cheapest providers.

In its update, the ACCC says providers should take a uniform approach to fees by subtracting the fees from the money that consumers want to send, upfront. While that will help consumers, the regulator stopped short of recommending that providers disclose mark-ups.

It said that such a recommendation would probably require government regulation or an industry code, and could be of limited utility to consumers and costly for providers to implement.

Dai Le, the federal member for the electorate of Fowler in Sydney’s south-west, says her electorate, as one of the most diverse in the country, has many people who send money to their extended families in their birth countries.

“You would probably not find anywhere as concentrated in terms of sending money overseas as here in Fowler,” she says. “I think that we need to have some sort of legislation to compel banks to be transparent [on costs].”

More transparency on how much people are paying would help drive competition and put more downward pressure on costs, Le says.

Jack Pinczewski, the Asia-Pacific government relations lead at Wise, a forex fintech that charges a fee but no mark-ups, says if the ACCC will not act to capture the impact of mark-ups for consumers, it is up to the federal government to act.

“It’s a fundamental matter of fairness,” Pinczewski says. “You would not go to a supermarket and buy milk if you did not know the cost; the same principle applies.”

The ACCC’s update includes a requirement for providers to show the estimated time a transfer would take to reach the recipient. Providers should also give customers the ability to track the status of their transfers.

The ACCC is seeking feedback from providers about its updated guidance.

Original Source: Sydney Morning Herald