The Australian Competition & Consumer Commission has kicked off an investigation on foreign transaction fees and charges by banks.
Treasurer Josh Frydenberg has directed the competition watchdog to start an inquiry into foreign currency conversion services.
“Millions of Australians are travelling overseas, buying things on their Visa card, transferring Australian dollars into foreign currency and the banks are charging them too much,” said Frydenberg.
“Given how widely foreign currency conversion services are used by consumers and businesses, reform in this area could make a real difference and put more money in the pockets of Australians.”
Australians are charged with $2 billion in foreign transaction fees each year from activities such as overseas money transfers, foreign currency purchases and business trading. According to the World Bank, Australia is the third most expensive G20 country for consumers and small businesses to send money from.
ACCC chair Rod Sims said the inquiry will examine the discrepancy between the advertised rates for international money transfers and the actual charges, including mark-ups. “We will be examining why major companies in Australia, including the big four banks, seem to be able to consistently charge high prices,” said Sims.
In a June report, the Productivity Commission recommended ACCC and the Australian Securities and Investments Commission to find “additional disclosure methods [that] could be used to improve consumer understanding and comparison of fees for foreign transactions”.