The overlooked hidden expense potentially costing 2 in 3 ‘complacent’ SMEs thousands
- 62% Australian businesses do their international trade through the big four banks
- 31% stick with familiar brands – despite paying hundreds more per transfer
- Larger businesses (74%) more likely to use a bank than small businesses (45%)
- Large businesses (42%) less likely to switch providers than small businesses (25%)
Despite higher prices, lower consumer spending and tightening profit margins, new research has found that the majority of small-to-medium businesses are overlooking an expense this year that could be costing them thousands over a year.
A survey of an independent panel of 200 Australian SME owners and decision makers, commissioned by comparison platform Money Transfer Australia (moneytransfer.com.au), found
The full survey results, including breakdowns across business sizes, states and territories, can be found here: https://moneytransfer.
Australia has robust foreign trade, with the Australian dollar being the sixth most traded currency in the world2. Foreign investment hit $4.7 trillion in 20233, while international goods trade jumped another $537million in June 2024 alone4. To date, Australia’s overall international trade is worth 48 per cent of its GDP5.
The Money Transfer Australia study sought to find out how Australian businesses were conducting their international business this year, and why they chose that method. For every $20,000 exchanged through the banks, businesses could be paying up to $850 extra, compared with a
Despite this, 62 per cent of business owners continue to do international trade through the big banks, and an additional 14 per cent transact through a smaller bank. Further, almost a third (31%) say they always use the same bank or provider.
Surprisingly, the survey results also found that 88 per cent of SMEs know how much they are paying in fees when they transact internationally, and 89 per cent know how much they are paying in currency exchange mark-ups. Nine in 10 (91%) check the fees and mark-ups payable before they transact.
Money Transfer Australia found that the larger the business, the more likely they are to use a bank for international money transfers. Three-quarters (74%) of those with more than 200 employees use a big-four bank, compared with 68 per cent of those with 11-50 employees and 45 per cent of micro businesses.
The larger the business, the more likely it is to also use the same bank or provider – specifically, 42 per cent of large businesses, 33 per cent of small and medium-sized businesses and just 25 per cent of micro businesses. Similarly, larger businesses are more likely to understand less how much they are paying in fees and currency exchange mark ups. Small businesses (11-50 employees) paid more attention to the extra fees.
Familiarity trumps higher fees
With just 7 per cent of respondents admitting they transact through a specialist money transfer provider, Money Transfer Australia asked respondents why they conduct foreign trade through banks. Trust and local presence were the most common reasons: more than half (51%) of respondents said they trusted banks more and almost a third (31%) said they prefer to have access to ‘people on the ground’ in Australia over an online service, which potentially offers support staff offshore.
Thirty (30) per cent don’t like to switch to new service providers that they are not familiar with. A small percentage (15%) get preferential rates through their bank, and a similar proportion (14%) simply like to do all their banking in one place.
Large businesses with more than 200 employees are most willing to pay the extra dollars to use a trusted, big-four bank for its international transfers (at 58%).
Money Transfer Australia founder Alon Rajic says: “In 2023-2024, Australian businesses closed down at almost the same rate as new ones opened7. In the volatile economy of the past few years, it makes good sense for businesses to identify where they could further cut costs.
“In the current economy especially, it is understandable that business owners want to stick with a money transfer service they know and trust. What many people don’t understand is that some non-bank money transfers specialists, such as TORFX and OFX, have been in business for as long as 20 to 25 years. They are ASIC authorised, well-established and reputable.
“Being complacent about bank fees or fearful of change can cost a business. Specialist providers don’t charge extra fees and offer exchange rates well below the going mid-market rate. It pays to shop around.”
The full survey results, including breakdowns across different business sizes and States, can be found here: https://moneytransfer.
About Money Transfer Comparison
Money Transfer Australia (moneytrans
2 Benchmark report | Austrade International; why-australia-
3 Benchmark report | Austrade International; why-australia-
4 International Trade in Goods, June 2024 | Australian Bureau of Statistics (abs.gov.au)
5 why-australia-benchmark-
6 https://moneytransfer.com.
7 Counts of Australian Businesses, including Entries and Exits, July 2020 – June 2024 | Australian Bureau of Statistics (abs.gov.au)
