ACCC Highlights Improved Price Transparency on FX Conversions

Source: Regulation Asia Editors, Regulation Asia 2020-07-25

An ACCC review last year found that a lack of pricing transparency forced consumers to rely on the more expensive big four banks for FX conversion and international money transfers.

The ACCC (Australian Competition and Consumer Commission) has said online FX conversion service providers are now providing greater access to accurate online calculators to help consumers better compare pricing, a result of its intervention.

Last September, the ACCC’s released the results of an inquiry into FX conversion services to examine the way these services and international money transfers are priced.

The review found that consumers overly rely on the big four banks for FX services despite the availability of much cheaper alternatives, in part due to the difficulties they have trying to compare pricing and make informed decisions about such services.

Some providers did not make an online calculator available to consumers looking to find price information, and many of the online calculators that were available to calculate FX conversions did not include the full price of transactions, including fees.

The report concluded that Australian consumers that used the big four banks to send international money transfers could have saved a collective AUD 150 million during the years 2017 and 2018, simply by leveraging a lower-priced provider.

“Following the ACCC’s intervention and subsequent review this year, more than half of the 26 prominent online FX suppliers reviewed now have an online calculator on their website or improved their existing calculator,” the competition regulator now says.

“This will make it easier for consumers looking to compare the total price of FX services from different suppliers.”

The ACCC’s report included best practice guidance on how businesses providing FX services should disclose prices to consumers. The guidance focuses on ensuring that businesses clearly disclose the full price of a FX service to consumers upfront.

Several providers are still working to meet the ACCC’s guidance.

“We do want to see all foreign currency service providers, not just some, lift their game so that consumers can benefit from greater price transparency and ultimately competition,” said ACCC chair Rod Sims.

“If we find that this industry is not adopting our best practice measures or even that businesses are moving away from them, we will work with the government on further measures to ensure consumers have access to this important information.”

ACCC Highlights Improved Price Transparency on FX Conversions

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