International money transfers never feel like an easy, straightforward process. But if you’re on the receiving end of a transfer, it’s important to know the costs. While this is different from country to country, Australia does charge fees that are specific to people receiving money that’s been transferred from abroad.
For example, in Australia, those receiving an international money transfer are charged $20 AUD to receive a bank cheque. They’re charged $11 AUD to receive a foreign currency transfer. In the USA some banks charge as much as $20 American. In Dubai and Japan, the amount is even higher. And that’s not even after all other fees or exchange rate margins have been added to the equation! This might sound like frustrating news – after all, you’re the one who is owed the money, shouldn’t you get as much as it as possible rather than losing a huge chunk of it to bank fees? In short, yes you should. Luckily, it’s possible!
Australia’s Costs for Receiving Money From Abroad
As we mentioned above, Australia does charge those receiving money from abroad – and the fee isn’t nominal. However, those fees that are charged by banks within Australia don’t account for any other markups that the person receiving money from abroad would be responsible for. The primary fee that people will encounter, after the initial transfer fee that Australia banks charge for bank cheques or transfers, is exchange rate costs. In many cases, there’s approximately a 5% spread that the person receiving a transfer has to account for – ouch! That’s a lot of the money that you’re owed getting tied up in transfer fees and exchange rate costs. Many might think this is unavoidable, but it’s not. There is a cheaper way to transfer and receive money internationally that helps you to avoid these astronomical bank fees.
Ways to Receive and Transfer Money from Abroad
If you’re looking to receive money from abroad, there are several ways to do so. Obviously, you can go the traditional bank route that was outlined above. Unfortunately, as we mentioned, there are a lot of fees and costs associated with that method of transferring and receiving funds. Of course, there are benefits to going through your bank, as well. The funds are either debited or deposited directly from or to your account. There’s no transfer period waiting time like there would be if you used an outside service. There is also the comfort of knowing that you’re working with an organization you trust with other financial aspects of your life – like banking, investing, etc. This might bring you some peace of mind.
If you’d prefer, there are some banks or organizations at brick and mortar locations that specialize in international money wiring. However, the fees here are high and they’re often less reliable than a bank or online service.
Another way you could go about this is through an online payments system such as PayPal. Because they’re connected to your bank, there isn’t a stressful transfer fee you’ll be accountable for. However, PayPal is notorious for having some high fees, especially for foreign currency transfer. However, PayPal is incredibly well known around the world. So, if you’re looking to not use a bank but still want the person you’re receiving money from to feel comfortable with the service you’ve selected, PayPal’s brand name recognition might be a selling point for you and your money transfer counterpart.
You can also elect to use a currency provider or money transfer company. These organizations are typically online-only and do not operate as a bank. That means that they aren’t bound by the same national regulations that a bank is, and they don’t have the same business costs. They pass this savings on to you in the form of no or low additional transfer or receiving fees, and a very small exchange rate markup cost. For example, if a bank charges a 5% exchange rate cost, many online-only money transfer companies only charge a low 1.5%. Not bad, right? Some of the companies you could elect to transfer with are World First, OFX, or FC Exchange. These organizations have excellent services, and can help you achieve your ultimate goal – sending and receiving money internationally without the additional costs and fees.
Let’s compare some of our options so you can decide what works best for you.
|Traditional Bank||Money transfer, wiring, etc.||-$10-$20 AUD for transfers or cheques|
-Additional exchange rate cost of approx. 5%
|-Exorbitant exchange costs
-Not very efficient
-Have to have an account or go to a physical bank location
|PayPal||Money transfer, invoicing, online payments||-5% for invoicing to the receiving party||-Online and app format|
-Slow transfer to bank
|World First||Money transfer, international payments||-Approx. 1.5% exchange rate cost margin||-Multiple kinds of accounts for transfers|
-No additional fees
-Approx. 1.5% exchange fee
-Online and app format
|-Sometimes slow transfers depending on region|
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