Many small businesses are being ripped off by international money transfer (IMT) services, according to new findings. A recent report by the Australian Competition and Consumer Commission (ACCC) found that SMEs are paying $200 million in unnecessary IMT fees by using high-cost providers. While the ACCC is making changes to make it easier for SMEs to “shop around”, the Council of Small Business Organisations Australia (COSBOA), has urged them to do more.
The ACCC’s proposed changes include a ‘Best Practice Guidance’, which would require IMT providers to subtract fixed fees from the amount sent, standardising fee structures across the industry.
However, not everyone has the time, resources, or knowledge to compare services, COSBOA points out.
“Over 40% of consumers do not compare,” said Luke Achterstraat, CEO of COSBOA. “And so this update does nothing to encourage them to seek better alternatives.”
Guiding SMEs towards better deals
COSBOA is now urging the ACCC to make it easier for SMEs to compare IMT providers. This could involve illustrating foreign money exchange (FX) margin costs in Australian dollar terms, which would make comparing IMT providers easier for business owners who are time-poor or who lack understanding of FX services.
The SME lobby group also criticised the ACCC for delaying reform in favour of further consultation with sectors that profit from FX fees.
“The ACCC is deflecting key findings and calling for more consultation from banks and the payments industry – sectors that benefit from FX margins,” Achterstraat continued. “We want to see the importance of lower FX prices for small businesses recognised and acted upon. Small businesses need relief, and they need it now.”
