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What Australian Banks Charge for International Payments

7 minutes
Finance
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International transfers are something we all take for granted. For a lot of businesses, they’re a matter of course, and just another part of doing business. But the ability to make international payments is critical in enabling businesses to grow, taking you from ‘just’ a local business to a player on the international market.

Think about the different situations where you’re required to make an international money transfer. As an eCommerce business, you might receive regular payments from overseas customers or clients. You might be a freelancer, and receive international invoices as part of your bread-and-butter.

Your business might have regular overseas suppliers to whom you pay bills, or remote staff that you employ elsewhere—whether it’s a software developer in Sweden, a copywriter in Canada, or a graphic designer in Ghana.

Commonly, you’re likely paying the USD bill via credit card for those necessary software subscriptions to keep your business and productivity ticking along.

But when making and receiving an international money transfer, you’ll notice that there are big variations in fees. And not just the international transfer fees, but the bank transfer fees and exchange rates, depending on the bank you choose to go with.

In this article we’ll drill down into what each different fee or rate is, and provide you with a clear idea of the range of different rates and fees you can expect to pay, depending on which business bank account you use.

What are the different fees involved with international money transfers?

There are a number of different fees involved when sending and receiving money internationally.

International transfer fees - sending money

You will typically pay a fee to transfer your money to an international bank account. Most banks have a fixed international transfer fee they charge you, however this cost is set by the bank itself, so will vary depending on who you choose. There may also be a difference in cost depending on the currency you’re sending, where you’re sending it, and whether or not you make the payment in AUD.

International transfer fees - receiving money

You may also be required to pay a fee to receive an international transfer. This fee is typically higher than a fee to send money. Only by a few dollars, but this adds up over time. This fee gets deducted automatically from the sum you receive.

Intermediary bank fees

When sending and receiving money internationally, your money most likely won’t go directly from one bank to the receiving bank. That’s because not every bank is connected—banks can only transfer money to those with which they have a direct financial relationship. 

So if you’re transferring money to an international recipient, but the receiving bank doesn’t have any relationship with your bank, then the transfer will go through a web of intermediary banks, transferring between the relevant financial relationships until it reaches its destination. And each bank within this network will change its own form of handling fees. 

The SWIFT network is the most common cross-border payment network used between banks for international transfers. Under the SWIFT network, you get charged one flat fee upon sending or receiving an international payment, which is added when you either send or receive the funds.

Beneficiary bank fees

If your bank and your recipient’s bank don’t have a direct financial relationship, then one or both of you will be required to pay a fee in order to process or receive the payment. This will be charged to the recipient upon receival of the money, which means that the recipient’s payment will be eroded by bank fees, resulting in them receiving less than expected.

Foreign exchange (FX) margin

The foreign exchange, or FX, margin is the small amount that a bank adds on top of their interbank exchange rate when making your foreign currency exchange. It’s a mark-up usually ranging anywhere from 1-5%, but this ultimately enables the bank to make money off your foreign exchange.

What’s particularly worrisome is that banks usually don’t disclose their mark-up. You’ll only notice this amount when you look at FX rates side by side, use a foreign currency conversion calculator, or during the currency conversion itself. And then, only if you’re looking for it.

Here’s how to gauge the bank’s approximate FX margin:

  • Check the bank’s current FX rate on their website

  • Check this against an online FX converter like XE.com, which will give you the interbank exchange rate

  • Note the difference in FX rate, for example, it might be 0.7681 vs 0.7462

  • That gap between the two FX rates? That’s the margin the bank is charging on top of the actual exchange rate

So unless you’ve carefully compared the differences, you likely won’t notice a few percentage points here or there. You’ll only notice it once you complete the conversion, and you may end up paying more or receiving less than you expected.

What does an international money transfer cost in Australia?

The fees, rates, and other costs involved with sending or receiving money internationally will vary depending on the business bank account you have, the transfer method you use, the bank you’re with, and the exchange rate at the time of transfer.

Here, we’re going to do an Australian bank comparison, so you can see which banks charge what international transfer fees, and how much you can expect to be out of pocket. 

We’ve written on each of these banks before, so click through on each name for more information on each set of international bank transfer fees.

NOTE: For the foreign exchange rate, banks will typically mark up the rate by a particular margin. This markup is never explicitly stated on their websites anywhere, so the margins outlined below are based on research conducted by comparing the banks’ FX rate vs. the interbank FX rate, and concluding from there.

CommBank Foreign Currency Account

Receiving fees: From $11 per transfer

Sending fees: From $6 per transfer, or $30 when issued via a branch

FX rate margin: 4-5% on top of the interbank FX rate

Westpac Foreign Currency Account

Receiving fees: $12 per incoming transfer

Sending fees: $10 per outgoing transaction, or $32 when issued at a branch

FX rate margin: Approximately 3-4% above the interbank rate

NAB Foreign Currency Account

Receiving fees: NAB charge a flat $10 fee for all incoming and outgoing payments

Sending fees: $10

FX rate margin: Approximately 3-4% above the interbank rate

ANZ Business Bank Account

Receiving fees: Up to $15 per international transfer received in a foreign currency

Sending fees: $7-$9 per foreign currency payment to an international account, and $18-32 per AUD payment made to an international account

FX rate margin: Approximately 3% above the interbank rate

Bankwest Foreign Currency Account

Receiving fees: $10 flat fee

Sending fees: $15 per international transaction, or $35 in-branch

FX rate margin: Approximately 3% above the interbank rate

ING Business Bank Accounts

At present, ING doesn’t offer any option for international business banking accounts, and no option for businesses to send or receive currency internationally.

Airwallex Global Account

Receiving fees: No fee

Sending fees: No fee

FX rate margin: All you’ll ever pay is a flat 0.3% or 0.6% above the interbank FX rate How can you save on your international transfer?

There are a few methods you can use when looking to save on international bank transfer fees.

Compare the fully-landed cost of making a transfer

This one may take some research, but it’s worth it. A few percentages here or there doesn’t sound like much, but when you scale up, it can become a large chunk of money that you’re giving directly to the banks.

So be sure to do your research on all the fees involved, and compare bank to bank. As we’ve found earlier, some banks charge a considerable amount more to make an international payment in-branch. Also, be sure to check that you’re sending in international currency, rather than AUD, which usually commands a higher fee.

Use a comparison calculator

Do your homework, and shop around. Using a comparison calculator is a great way to compare the different fees and FX rates that banks are charging. There are some great comparison calculators out there that allow you to compare different banks’ international transfer fees, FX rates, and associated costs.

In doing your due diligence, you’ll be able to find the most suitable bank for your business, and your budget.

But if you’ve looking for an alternative to the big banks, Airwallex has you covered.

Opening an Airwallex Global Account avoids bank transfer fees altogether

Going outside the big banks and opening a bank account in a foreign currency is the most direct way to send and receive money internationally. But, unfortunately, it’s also the most difficult.

An Airwallex Business Account makes it easy for you. You’re able to make international transfers in up to 23 different currencies, without even leaving your office. 

You also receive access to Global Accounts which are created using local banking details for that currency. This works to reduce the fees that you and your recipient pay, and ultimately makes it easier for them to understand your banking process (as it works just like a local transfer).

With a Global Account, you won’t pay any international bank transfer fees, and no monthly account fees at all. We don’t charge fees to send or receive money internationally (if your recipient’s bank is within our payment network). There are no SWIFT fees when paying locally, and therefore no intermediary bank fees. 

You simply get limitless, same-day international money transfers. And you can start sending and receiving money as soon as your account is approved.

And when it comes to FX, you get simple, transparent, low pricing. You only pay a small 0.3% or 0.6% margin above our interbank rate—we’re very open about this.

So get in touch with us today to discuss how an Airwallex Global Account will facilitate your business’ growth internationally.

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