New research from Money Transfer Australia revealed that 62% of Australian SMEs still use the big four banks for international trade, despite high exchange rate mark-ups and fees.
According to the ACCC, specialist money transfer providers often offer better rates than banks, even after banks reduced their transfer fees over recent years.
The survey of 200 SME owners found that businesses could be paying up to $850 extra per $20,000 transferred through banks, compared to as low as $100 with non-bank providers.
Yet, familiarity keeps many businesses with traditional banks; 31% of respondents always use the same provider, even if it costs more.
The survey showed that larger companies are more likely to use banks for transfers, with 74% of businesses with over 200 employees relying on big banks, compared to 45% of micro businesses.
Despite knowing the high fees, many SMEs prefer banks for their trusted presence and local support.
“Being complacent about bank fees or fearful of change can cost a business,” said Alon Rajic (pictured above), Money Transfer Australia’s founder. “Specialist providers don’t charge extra fees and offer exchange rates well below the going mid-market rate. It pays to shop around.”
Despite the savings potential, only 7% of SMEs use specialist providers.
Trust in banks and the convenience of a local presence are the primary reasons businesses stick with higher-cost options.
More than half of respondents said they trust banks more, and 31% prefer dealing with people on the ground rather than online services, even though this decision could be costing them thousands each year.
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