International money transfers

If you need to send money from Australia to someone overseas, then chances are you’ll do it via an international money transfer.

Compare International money transfers from Australia

International money transfers are the most common way of sending money electronically from an Australian bank account to another person overseas. Over $7 billion is sent out of the country every year using international money transfers, making them an effective and trustworthy method of sending funds abroad. With many options, providers, exchange rates and fees, it’s always crucial to compare your options, so you can find out more about them in this comprehensive guide.

What is an international money transfer and how does it work?

An international money transfer works in pretty much the exact way it sounds – it transfers money internationally. Similar to transferring money domestically, international money transfers are offered by companies and banks to shift money from your bank account to another person’s bank account overseas. There is also the option to arrange for the person to collect the money at their local branch or agent, or transferred to an online wallet linked to their phone number.

What are exchange rates and how do they impact international money transfers?

Not all countries use the same currency. An Australian dollar won’t be ‘worth’ as much as an American dollar, nor will it be equal to one Great British pound. Exchange rates represent how much an Australian dollar is worth in the currency you’re wanting to transfer into.

Exchange rates are always fluctuating minute by minute, so you can’t be sure of what rate you will get on any given day. This is where an exchange rate guarantee can help to eliminate some uncertainty. An exchange rate guarantee refers to whether the exchange rate you’re offered is guaranteed (i.e. locked in) or whether it could change. If you are given a guaranteed exchange rate, it will remain fixed for a specified period — normally between 2 and 72 hours.

Be mindful of the advertised currency exchange rate, as you may need to pay a premium on this exchange rate at the time of transfer as shown in the example below.  

How do I send funds through an international money transfer?

Before you can transfer money abroad, you’ll need to have the following pieces of information — regardless of which international money transfer option you choose.

Details you need: What is it? Why it is needed
The recipient’s country
This is the country where the intended receiver lives.
To detail which country the international money transfer is going into and determine its exchange rate with Australia.
The recipient’s bank name
It is used to identify the bank that the receiver wants to receive the money, as there may be many banks in the recipient’s country.
It is needed to ensure that the recipient receives the money from abroad in the bank so they can easily make use of the funds received.
The recipient’s account name
This is used to identify who the money is being sent to
It is needed to confirm the identities of the person that is receiving money from abroad.
The recipient’s account number
Used to identify the account number that is receiving the money being sent from abroad.
To know the specific account that the money from abroad is intended for.
The recipient’s home address (for certain providers)
This is the place where the recipient lives.
To verify and confirm recipients of money transferred from abroad.
Plus, one of the below:
SWIFT (Society for Worldwide Interbank Financial Telecommunication) code or BIC (Bank Identifier Code)
SWIFT/BIC is the code between 8 and 11 alphanumeric characters consisting of country code, bank code, location code, and sometimes branch.
This is needed to ensure that your money transferred goes to the right recipients.
IBAN (International bank account number)
An IBAN is the alphanumeric characters between 15 and 30 used in some countries to identify the recipient’s account specifically.
Required in some countries to ensure that the intended receivers are the actual receivers. This eliminates the risk of sending money to the wrong person.
ABA (American Bankers Association) routing number
This is the 9-digit code given to each financial institution in the US by the American Bankers Association.
It is needed to identify the receiver’s bank in the US. This is only required for American financial institutions.
IFSC (Indian Financial System Code)
This is an 11-character code that consists of numbers and alphabets used for electronic money transfers in India. It is also used to identify the bank that receives the electronic transfer in India.
This is needed when sending money to someone in India.

If you’re unsure exactly what information is needed for your fund’s destination, your transfer provider or bank will be able to tell you which specific details they require. Just remember, it will be on you to actually obtain and provide that information.

How much do international money transfers from Australia cost?

We make it easy to compare your options and access the lowest cost transfer option – a small difference in fees can mean more money arrives to its recipient overseas.

The total ‘cost’ of transferring money over international borders extends past simple fees, so it pays to do your research. On top of fees for both sending money and receiving money at the international end, a major contributor to the cost of international money transfers is the exchange rate that you pay. For example, if you are transferring $1,000AUD to the USA and the wholesale exchange rate is $0.77USD, the exchange rate you get from the institution conducting the transfer will be different — let’s say $0.72USD — and the institution keeps the difference, in this case $0.05USD or $50USD.

There are significant price differences amongst companies offering international money transfers. In fact, providers of currency exchange and international fund transfers remain in business by charging above-market exchange rates. What this means is that you’re likely to pay an exchange rate that is higher than the ‘actual’ exchange rate set by the Reserve Bank of Australia, like in the example above. We make it simple to compare all aspects of different transfer providers, including fees and exchange rates.

Some other common fees include:

  • A charge to send and/or receive money.
 
  • Cancelation or adjustment fees in the event that you need to stop or change the transfer.
 
  • Third-Party Institution Fee — This fee is one that often catches people out. It’s a fee charged by the receiving institution in some cases. It’s important to check whether you’ll be charged once the money arrives overseas as these fees vary greatly between different institutions.

What are my options for international money transfer providers in Australia?

The benefits of living in a digital era mean that you have many more options than just a traditional bank for international money transfers. Technological advances in online banking have made transferring money possible internationally through many online channels, including through your smartphone. In fact, there are even specialist online transfer companies that offer an alternative for sending money internationally. 

The most common options available to you are banks, credit unions, and specialist international money transfer providers; there’s quite a bit of choice, so it’s definitely a wise decision to compare your international money transfer options before going ahead. When deciding which type of international money transfer provider to use — be it a bank, credit union or specialist provider — factors such as convenience and efficiency will influence your decision. Specialist providers may be the best choice for you, as they can often be cheaper than banks in terms of fees and exchange rates. However, banks and credit unions, although potentially offering a less competitive exchange rate, can provide greater accessibility in the form of physical branches.

How to compare international money transfer providers

The right IMT provider could mean a smoother transaction or a cheaper price, so it's essential to compare products

Pros and cons of international money transfers

We provide a succinct overview of both the pros and cons of using an international money transfer to send funds.

PROS

Traceable

These days you’ll be able to trace the funds to know where they’ve gone and when they’ve arrived.

Safe

Using transfer facilities or banks means that you avoid the unpredictability of cheques or relying on the postage network.

Convenient

Online options make it easy to transfer funds day or night without needing to attend a bank or agent in person.

CONS

Fees

There are numerous fees involved in transferring money internationally, which vary from provider to provider.

Non-reversible

One downside to having efficient processing is that most international money transfers are non-reversible. For those companies who do offer cancellation, a fee will generally be applied, and the cancellation may not be guaranteed.

Exchange rate

You’ll need to pay an exchange rate to convert Australian Dollars (AUD) into the appropriate currency to be received internationally. In addition, you’ll likely incur a margin on top of the exchange rate.

Frequently asked questions about international money transfers

We answer some more frequently asked questions that you might have about international money transfers.

How do I increase the safety of my international money transfer?

While transferring money overseas is a relatively safe practice, there are some steps to follow to ensure the transfer goes smoothly. To ensure the safety of your transfer, use a reputable money transfer provider who is licensed and regulated and double-check all the account details before lodging. Using an international money transfer provider who is regulated and authorised by the Australian Securities and Investment Commission (ASIC) provides an extra degree of reassurance if any issues occur. Furthermore, it’s advisable to never use an unsecured Wi-Fi connection to transfer money or only transferring to people you know to remain vigilant to possible scams.

Do I need to pay tax on international money transfers?

Tax usually refers to income tax, and therefore there are limited circumstances where any tax would be applicable to money you have already earned, paid tax on, and are now transferring overseas. However, if you are receiving money from abroad, then it is advisable to seek guidance from the ATO or registered tax agent as to whether tax is applicable. This also applies if you are transferring money from Australia to a foreign bank account in your name. 

How long does it take for the money to arrive overseas through an international money transfer?

Depending on the provider you choose, funds can either be transferred instantaneously or take up to five business days to hit the person’s account. It all depends on where the money is being sent and which international money transfer provider is doing the transferring.

Will I need to open a new account before I can use an international money transfer?

Unless you’re using your existing bank, then it’s likely you’ll need to establish an account with whichever international money transfer institution you choose to use. This is particularly important to ensure your identity is correctly verified. Set up is usually very straightforward.

How do I find the receiver’s bank code?

The receiver will need to provide this to you by contacting their bank for the details.

Are PayPal and Western Union good international money transfer options?

They can be – generally services like these will have stricter limits on the amount you can transfer (such as $60,000 on PayPal in Australia) but are often favoured due to their convenience. However, fees and exchange rates can be higher with these services, so ensure you’re fully aware of all the costs before proceeding.

Will the receiver need to have a bank account?

Yes, however, online services such as PayPal can bypass the need for an account, although they may not offer the same safeguards. 

What is a spot deal?

A spot deal lets you lock in a certain exchange rate so that you have certainty of how much the value of your transfer will be once it arrives internationally. This avoids any spikes in exchange rates affecting your transfer in transit, however additional fees may apply to lock in a spot deal.

Can I transfer money to an account in my name internationally?

If you’re a dual citizen, looking to relocate or just take a working holiday abroad, using an international money transfer is a safe option to transfer money to yourself. Be sure you pay mindful attention to the fees your bank overseas may charge to receive the money.