Our Pick Of The Best Money Transfer App For Australians

An IMT is an electronic transfer of funds via a network that is administered around the world by banks and specialist transfer services such as Moneygram, Western Union, Wise, OFX or XE.

Such transactions, also called telegraphic transfer (TT), wire transfer or SWIFT transfer, don’t actually involve the physical exchange of cash but are settled electronically. They are a secure and convenient method to move money from an individual account with one financial institution to another account with an institution in a different country. 

According to the ACCC’s latest report, the total value of online IMTs from Australia has continued to grow each year, driven by a shift from in-store methods to online transfers. 

The market has experienced significant transformation over the past five years, led by the growth in fintech businesses, which have significantly increased their market share by offering cheaper prices and, sometimes, better service than the big banks.

Still, IMT costs in Australia remain above the internationally agreed targets of 1% for transfer to advanced economies and up to 3% for remittances to emerging market or developing economies.

“Significant savings are available when consumers shop around, use online FX calculators to compare prices, and switch providers accordingly,” ACCC Chair, Gina Cass-Gottlieb, said.

While the major banks have lowered prices in response to competitive pressure, the big four banks’ prices remain higher than many of their digital rivals, the recent ACCC report found. Similarly, US payments giant Paypal has struggled to be competitive in the Australian IMT market, with its prices higher and services lagging its digital peers.

Here are our top picks for the best money transfer services available to Australians as of November, 2024. We have split our list into two sections: those that scored the best overall, including on price, features and customer service, and those IMTs that offer decent rates, but with fewer bells and whistles.

Note: The list below represents a selection of our top category picks, as chosen by Forbes Advisor Australia’s editors and journalists. The information provided is purely factual and is not intended to imply any recommendation, opinion, or advice about a financial product. Not every product or provider in the marketplace has been reviewed, and the list below is not intended to be exhaustive nor replace your own research or independent financial advice.

These are our pick of the top five money transfer options that may not offer the above list’s bells and whistles, but nevertheless offer great rates on the AUD to UK pound pair, as well as decent features.

To establish the above list, Forbes Advisor Australia conducted extensive research into the international money transfer offerings available in the market. These were compared on the basis of a number of factors:

• The overall money received or recipient amount, which the ACCC report found is what consumers primarily rely on to judge value. Providers were scored on this basis, with the cheapest transfer scoring the highest points, followed by the next cheapest and so on. We also looked at whether they display an FX calculator on their website, as recommended by the ACCC guidelines. Providers received a total score out of 50 for this section.
• Fee structure and clarity: does the IMT provider offer a mid-market rate, which is fairer to customers, and is their fee structure transparent and easy to understand? We scored providers a total of up to ten possible points for fee structure.
• The average customer ratings for each provider on Google Store, Apple Store and TrustPilot. IMTs were scored out of a possible 20 points.
• Important additional features for each provider, including the average transfer time, whether they support cash pickups, the number of currencies they offer transfers in, and the alternative payment options to send money. Providers were scored out of 20 for extras.

About Star Rankings

You will note that we have included a star rating next to each product or provider. This rating was determined by the editorial team once all of the data points above were considered, and the pros and cons of each product attribute was reviewed. The star rating is solely the view of Forbes Advisor editorial staff. Commercial partners or advertisers have no bearing on the star rating or their inclusion on this list. Star ratings are only one factor to be considered, and Forbes Advisor encourages you to seek independent advice from an authorised financial adviser in relation to your own financial circumstances and investments before you decide to choose a particular financial product or service.

The consumer watchdog recommends the following tips before undertaking any international money transfer:

• Shop around for the cheapest service: The ACCC found significant price differences across international money transfer suppliers, so comparing prices using foreign exchange calculators (on their websites) is the best way to understand who can offer the best value for the transaction. Generally, consumers should consider using non-bank suppliers as they are often better priced.Money transfer services that do not display an FX calculator are not following the ACCC’s Best Practice Guidance for IMT transparency.
• Look at the total price/amount you will receive: The best way to compare suppliers is to consider the total price and the amount you will receive. This helps limit any tricky calculations that consumers need to make to account for varying fees and FX margins charged by different suppliers.
• No such thing as a free lunch: Suppliers who advertise transactions as ‘fee-free’ may still charge a hidden margin on the exchange rate. This is sometimes negotiable or can vary based on the amount being transferred. Consumers also need to consider other fees, apart from the transfer service’s own fees. These could be in the form of correspondent banking fees or recipient bank fees.
• Time the transfer: Like all financial markets, currency markets are volatile and when exactly you transfer the funds may impact the value for money you get. High value transactions can be impacted by the time of year or even whether a transfer is made on a weekday or weekend.

Fee Types

International money transfers, particularly those involving the banking system, can incur a number of different fees and charges. These include:

• Upfront transfer fee: This is also known as the “sending fee” and is often charged as a flat fee for processing international transfers. This fee can vary between $10 to $30, based on the service provider, the amount being remitted and the destination country.
• Receiving fee: Some banks charge the recipient a flat fee for processing the incoming funds. This can range between $10 to $30 depending on the destination bank and country.
• Intermediary fees: Also known as correspondent bank fees or third-party charges, especially when the international SWIFT system is used, these are charges incurred when your funds need to pass through one or more intermediaries. This is usually a percentage of the remittance amount, and ultimately reduces the amount the recipient will get.
• Exchange rate margin: Many money transfer providers will mark up the exchange rate for the transfer, which makes it less favourable for consumers than the mid-market rate used in wholesale currency transactions. This markup is generally 3% to 5% and can sometimes be the biggest hidden cost in an international money transfer.

According to the ACCC, the total value of online IMTs has increased over the past few years, partially driven by Australian consumers switching from in-store methods in an increasingly digital world, and also helped by the entry of new fintech suppliers who have significantly altered the competitive landscape.

Using IMTs comes with both advantages and disadvantages. 

Pros:

• Global reach: IMTs are generally conducted electronically through the global SWIFT network. Most providers are also capable of handling multiple currencies, so it is possible to transfer money to most countries around the world.
• Faster transfers: An IMT can take between one to five days, but some fintech suppliers offer real time or instantaneous transfers. This is because modern-day money transfers don’t actually involve the physical exchange of cash but are settled electronically.
• Safety: All banks and most specialist money transfer providers are regulated by central banks and corporate regulators in their respective countries. This helps to increase the security and safety of funds being transferred.

Cons:

• High fees and charges: IMTs can have high fees, including hidden fees and charges. Banks, in particular, also charge unfavourable exchange rates. The ACCC’s latest review has found that while transfer costs have decreased in recent years, there is significant scope for further savings by shopping around.
• Amount limits: Many banks or transfer service providers impose a minimum and maximum limit on the amount being transferred. Also, higher fees often make transfers of small amounts impractical.
• Speed: While some fintech providers offer same day transfers, larger players such as banks take between one to five days to complete an international money transfer. The time taken also varies depending on the amount, currency and the destination country.

• Correspondent bank network: An arrangement under which banks operate as agents for each other to facilitate the transfer of funds from one country to another.
• Correspondent banking fee: A fee charged by a correspondent or intermediary bank for an IMT. The fee may be deducted from the amount transferred.
• Fees: Fees include correspondent banking fees, commissions or charges payable by a consumer for an IMT service. Fees are separate from, and may be payable in addition to, the FX margin.
• FX margin: The margin on the wholesale exchange rate that suppliers of IMT services charge. This is estimated by subtracting the mid-market rate from the retail exchange rate.
• FX calculators: The digital tool that is required by the ACCC’s Best Practice Guidance. It is a calculator on suppliers’ websites which includes the exchange rate, all fees (including correspondent banking fees), and the total amount of foreign currency the recipient will receive.
• IMT supplier: A supplier which provides the transfer of money from a sender in Australia to an overseas recipient. As part of the service, the money is converted to the currency of the destination country, or another foreign currency.
• Mid-market rate: It is the midpoint between the buying price and the selling price for a given currency ‘pair’ (such as Australian dollars and GB pounds) at a point in time. The mid-market rate is indicative of the wholesale exchange rate at which financial institutions and central banks trade very large values and volumes of foreign currency.

Data reporting by: Prashant Mehra