UK-based fintech TransferWise this week announced its decision to rebrand to ‘Wise’, in a move to reflect how it’s now expanded beyond international money transfers (IMTs).The fintech, which began operating in Australia in 2015, said its product range has since grown to meet the international banking needs of consumers and businesses by offering a “cheaper, faster and more pleasant” alternative for sending, spending, receiving and holding money overseas. “For generations, banks have been defined by borders. Traditional bank accounts trap our money in one country, making international lives more difficult and expensive than they need to be. We shouldn’t have to accept this status quo,” Wise’s chief executive officer and co-founder Kristo Käärmann said. “[This week] our name catches up with who we’re already building for - a community of people and businesses with multi-currency lives,” he added. “We’ve evolved to fix more than just money transfer.”
Ecommerce has been this year’s big success story for Australian businesses, with many seeing their sales bounce back thanks to record-high numbers of people shopping online.Yet, as promising as the domestic eCommerce market looks right now, new data suggests your business could make even greater gains by going international.International money transfer (IMT) specialist OFX reported that revenue for its online clients selling overseas jumped a massive 41% last month, compared to a year ago.Their total volume of goods sold was also significantly higher this November than the last - up 51% from a year ago. OFX’s strategic partnerships director for eCommerce, Edward Wiley says these businesses have mainly benefitted from a COVID-induced growth in online sales, not just here in Australia but in other larger countries like the US too. For comparison, Australia’s eCommerce market is forecasted to hit US$27.2 billion by the year’s end, whereas the US’s is projected to reach a much higher US$431.6 billion, according to analytics company Statisca. “Australian businesses are doing really well but some of them might be missing out on this once-in-a-lifetime opportunity to expand internationally and catch that kind of [global] market share while everyone is moving to buying online,” Wiley says.
The Australian dollar yesterday broke past 74 US cents and hit its highest level since August 2018.US dollar weakness and an uptick in domestic economic activity have helped to prop up the Aussie dollar and right now the AUD is trading at around 74.1 US cents. This comes after Wednesday’s release of Australian Bureau of Statistics data which indicated Australia’s economy is bouncing back. Our gross domestic product (GDP) in the September quarter is up 3.3%, thanks to COVID-19 restrictions easing across most of the country (although GDP is still 3.8% lower than a year ago). This sentiment of cautious optimism was also reflected in Reserve Bank Governor Phillp Lowe’s statements on Tuesday, following the latest RBA meeting. “The positive news on vaccines has boosted equity markets, lowered risk premiums and supported further increases in some commodity prices. The improvement in risk sentiment has also been associated with a depreciation of the US dollar and an appreciation of the Australian dollar,” he said. “In Australia, the economic recovery is under way and recent data have generally been better than expected. This is good news, but the recovery is still expected to be uneven and drawn out and it remains dependent on significant policy support.” A lower Aussie dollar makes Australian exports cheaper and more attractive to overseas buyers, so a stronger AUD isn’t ideal for improving the GDP. But the strong Aussie dollar right now is beneficial for anyone looking to transfer money overseas from Australia to the US. It means the currency market has moved in your favour and you can potentially get more USDs for the same amount of AUDs sent. Remember though, that even if the market is looking favourable for you, different bank and foreign exchange (FX) specialist providers will still charge their own margins and fees on top. So it’s a good idea to shop around regardless. That way you can find the cheapest deals for your money transfer. Compare a few competitive exchange rates in the table below or jump over to our international money transfers hub for even more options. Not sending money overseas just yet? Look out for a feature known as a forward contract (offered by many FX specialists). This tool allows you to secure today’s rate for a transfer in the future, sometimes up to two years in advance.
International money transfer fintech, TransferWise has hit a major milestone, as it becomes the first company in over ten years to receive a restricted banking licence as a purchased payment facility (PPF) provider. For context, gift cards, loyalty cards and travel cards are all examples of PPFs, as they involve the provider making payments to others on behalf of the user. The Australian Prudential Regulation Authority’s decision to grant TransferWise a PPF licence this week means it’s now considered a ‘limited authorised deposit-taking institution’ (ADI). So what’s the significance of this new label? Simply put, it gives TransferWise direct access to Australia’s real-time payments system, known as the New Payments Platform.Currently, direct access to the New Payments Platform is only available to ADIs or banks, so fintechs without ADI status still have to pay third-party intermediaries to gain access.But thanks to APRA’s decision to open up that exclusivity to TransferWise, the fintech will no longer need to rely on those intermediaries, bringing down their wholesale banking costs.TransferWise says that as a result, it’s yet another step closer to providing instant international money transfers to Australians at a lower cost. “By becoming independent and cutting out the middleman, we’ll be able to save our customers even more money and time in the process,” TransferWise Australia’s country manager, Tim Cameron said. As a point of comparison, after being granted the PPF-equivalent licence in the UK, TransferWise said it was able to make transfers to and from the UK in under 20 seconds and cut its pricing by nearly 30%. To date, PayPal is the only other player that holds a PPF licence. However, this is somewhat a bittersweet win for TransferWise, as the PPF licence category will soon be updated with a Stored-value Facility regime to account for the rise of digital wallet payments. It’s not yet clear whether the new regime will cover direct access to the New Payments Platform.
As anyone with loved ones overseas can attest to, spending Christmas away from family is tough. But with travel bans and border closures still in place, that may be the reality for many Australians this year. Still, there’s no need to hit ‘cancel’ on celebrations just yet. Besides navigating time zones to Skype call your nan or sister on Christmas Day, if you’re looking to treat your loved ones to something extra special this festive season, cash is a popular gift option. Given the convenience, speed and low cost of international money transfers, it’s little surprise that they’ve become an attractive avenue for migrants looking to support - or in this case, pleasantly surprise - family back home. In fact, in 2019, Australians sent a whopping $7.44 billion across the globe according to the World Bank. But before you send off your first batch of cash, it’s worth doing your research on things like how to pick the right provider for your transfer and the biggest traps you’ll want to avoid. To keep you in the know, we’ve answered some of the burning questions you might have about Christmas money transfers below.
Exchange rates are looking favourable for Australians sending money overseas as the Aussie dollar rose off the back of US election results. Right now, the AUD is trading just below 73 US cents, according to the XE Currency Converter - up from around 71 US cents at the start of election week. This is the first time since mid-September that the currency has broken past 72.5 US cents. While the gap between US$0.71 and US$0.73 seems almost negligible, for larger international money transfers (IMT), this could be a difference of hundreds of dollars.IMT provider OFX’s senior corporate manager, Matt Richardson said Joe Biden winning the presidency boosted the market appetite for risk (known as ‘risk on’ sentiment). As a result, investors flocked to purchase stocks and high-yield currencies like the AUD, raising the value of these riskier assets. “The democrat led government is expected to implement significant Coronavirus relief programs and alleviate tensions with key global allies, creating a ‘risk on’ environment across financial markets,” Richardson said. “The Australian dollar has advanced against a basket of major counterparts in the midst of [this] ‘risk on’ move, creating an opportune time for those settling costs overseas to reduce the AUD expenditure or maximise their foreign currency return.“Conversely those sending funds back down under [would] suffer a higher cost or smaller return on the back to the AUD appreciation.” In other words, bigger savings are now on the table for individuals and businesses sending funds from Australia to countries like the US and the UK, thanks to stronger AUD/USD and AUD/GBP exchange rates. But you may lose out if instead you’re moving money from the US and UK to Australia.
With Christmas just around the corner, SendFX is giving out a special treat to Australians sending money overseas.For a limited time, if you register a free account with SendFX and make transfers over AU$1,000, you could be rewarded with a $100 EFTPOS gift card. This offer began on 31 October and will run for two months until the end of December. Once you’ve made your first transfer, the gift card should arrive in 30 days or less, allowing you to redeem $100 in credit at any checkout that accepts EFTPOS. Mozo Director Kirsty Lamont said for the one third of Aussies born overseas, international money transfers (IMT) have always a way to send income and support family back home, but this Christmas, they could also be a way to stay connected.“Christmas reunions won’t be the same this year as travel bans and social distancing measures keep us separated from loved ones overseas. That’s why cash gifts are such a savvy way around all those restrictions - they keep the tradition of exchanging presents on Christmas Day alive, plus they’re a lot more practical and welcome at a time when many are still struggling financially,” she said.
Sending money overseas just got even more competitive, with TransferWise announcing a series of price cuts this week for Australians transferring money to Asia. TransferWise Australia users can now save up to 23% in fees when moving funds to 10 different Asian countries, including China, India and Thailand.The exact savings will depend on the destination and amount sent. For instance, AUD 1,000 transfers to China cost 13% less than before, which means you would pay $13.11 instead of $14.95. Meanwhile, the cost of sending AUD 1,000 to Sri Lanka has fallen by a much larger 23%, reducing the fee from $9.72 to $7.52.Below is a full breakdown of TransferWise’s fee reductions:
Digital payments platform Azimo has become the latest international money transfer fintech to set up shop in Australia, joining the IMT scene today with a promise to deliver competitive exchange rates and fast speeds to customers. The UK-based service has operated in Europe since 2012, and now eight years on, it's set its sights on Australia as its next large sending market. “We’ve always been more interested in the Asia Pacific than the US,” Azimo’s chief operating officer, Dora Ziambra says. “Australia is also an English speaking country where there’s less localisation needed [than other Asian Pacific countries], and it’s a place where 30% of the population is foreign born and has connections to another country. So it lends itself as a next step of international expansion.”And with AU$28 billion remittances sent abroad from Australia every year, Ziambra says “there’s still room for Azimo to offer a competitive product.”She says Azimo stands out from other digital players in terms of the breadth of its network and its wide range of payout methods. “We cover a lot more countries … and [in addition to bank-to-bank transfers] we offer cash payout, mobile wallet, mobile top-up, sending credit to phone, home delivery in some cases, and bank deposits.” Customers are able to send money to more than 200 countries and territories, including China, Vietnam, the Philippines and Thailand. And while large IMTs with many other providers can take between one to five working days to process, Azimo says most of its transfers arrive in less than 24 hours. Instant transfers are also available for over 50 countries, depending on which payout method you choose. For example, while sending funds to a Thailand bank account would be instant (i.e. complete in a few minutes), for transfers to the Philippines to occur immediately, you may need to opt for a cash pickup instead.Azimo is also expected to appeal to Australia’s Chinese expat community, with instant transfers available thanks to Azimo’s integration with Alipay, a major online payments platform in China. All the customer will need is their recipient’s AliPay ID to send money instantly in yuan. “Delivery speed is something we keep investing in,” Ziambra says. “A lot of our customers - as many as 75% - send money for family support, so getting the money there as quickly as possible at the best price possible is what we aim to offer.”