You enter $2,000, press send, and your family member overseas receives something noticeably less than $2,000 worth of their currency. That gap is not a single charge. It is usually the combined result of a transfer fee, the exchange rate applied to your money, and any deductions taken further along the payment chain. Understanding which of the three is doing the work is the whole task, because each one is dealt with differently.
Start with the figure that matters: the amount received
The Australian Competition and Consumer Commission (ACCC) makes a practical point on its foreign currency and money exchange guidance: comparing the amount that will be received limits any tricky calculations a consumer needs to make to account for fees and foreign exchange margins.
That is the simplest way to read two competing quotes. Ignore the headline "zero fee" claim and the advertised rate, and compare only the final figure the recipient is expected to collect, in their currency, at roughly the same moment in time. Everything else is an input to that number rather than a substitute for it.
The three places money can leave a transfer
1. The transfer fee. A stated charge for sending the money, sometimes flat and sometimes scaled to the amount. It may be added on top of your send amount or deducted from it, which changes the amount actually converted.
2. The exchange rate margin. This is the part most people miss. The rate you are quoted is generally not the same rate your provider obtains when it trades currency. The gap between the two is the margin, and it is a real cost even when the transfer fee is described as free. A "no fee" transfer can still be more expensive than a fee-charging one if the rate applied is further away from the rate your provider itself gets.
3. Intermediary or receiving-bank deductions. International transfers do not always travel directly from the sender's provider to the recipient's bank. Where other institutions handle the payment along the way, they may deduct their own charges from the amount in transit, so the recipient receives less than the amount your provider said it sent. Whether this happens, and who bears it, depends on the corridor and the institutions involved.
Why the rate you saw is not the rate you got
The Reserve Bank of Australia (RBA) explains in its Exchange Rates and their Measurement explainer that an exchange rate is a relative price of one currency expressed in terms of another, and that the AUD/USD rate, for example, gives the amount of US dollars received for each Australian dollar. Australia has had a floating exchange rate regime since 1983, and the RBA notes that a floating rate can result in larger movements in the rate than a fixed arrangement would.
Two practical consequences follow from that for anyone sending money:
- The rate is a price that moves continuously while markets are open. A rate displayed for reference before you commit is not automatically the rate applied at settlement unless your provider has locked it.
- The longer the gap between quoting and settlement, the more scope there is for movement. This matters for transfers scheduled in advance and for transfers that sit pending over a non-business day.
The RBA's explainer also covers how Australia's exchange rate is measured and the role of the Australian Foreign Exchange Committee, which is useful background if you want to understand how published rates are constructed rather than relying on a single provider's figure.
Weekends and market closures can change the price
The ACCC notes that currency markets close for the weekend and that some suppliers can charge an extra fee, or may apply a worse exchange rate over the weekend, to allow for possible movement in the market.
This is worth planning around. If a transfer is not time-critical, quoting and sending during the week avoids the weekend pricing question entirely. If it is time-critical, ask specifically whether a weekend loading applies and whether the rate is locked or indicative.
How to read the transfer summary
Before you confirm, work through the summary line by line. The following items should each be visible or obtainable; if one is missing, that is a question to ask, not an assumption to make.
| Summary item | What you are checking |
|---|---|
| Amount you send | Is the fee charged on top, or deducted from this amount before conversion? |
| Fee | Stated in AUD, and whether it varies by amount, destination or payment method |
| Exchange rate applied | The actual rate used for your conversion, not a reference rate |
| Rate type | Locked for this transaction, or indicative until settlement |
| Amount to be received | In the recipient's currency — the figure to compare between providers |
| Estimated arrival / value date | Whether it crosses a weekend or public holiday |
| Intermediary deductions | Whether charges may be taken in transit, and by whom |
| Recipient-side charges | Whether the receiving bank also charges to credit the funds |
Comparing the "amount to be received" across two providers, quoted within minutes of each other, is the comparison that holds up. Comparing advertised rates alone does not, because the rate and the fee are set together.
What happens at the other end
Two ACCC points are relevant here. First, if you operate a business and process payments outside Australia, you should alert your customers before they enter into a transaction if they are likely to be charged international transaction fees. Second, it may be misleading if an overseas business indicates that a consumer will be charged in Australian dollars but then charges in a foreign currency.
For a consumer, the practical reading is: pay attention to which currency you are actually being charged in at checkout or at the point of payment. If you are quoted in AUD but the transaction settles in another currency, the amount leaving your account can differ from what you agreed to, and the conversion is being done at a rate you did not choose.
Questions worth asking your provider
- Is the exchange rate on this quote locked for the full amount, or indicative until the transfer settles?
- Are any fees deducted from the amount converted, and does that change the amount received?
- Could intermediary or receiving-bank charges reduce the amount my recipient collects, and who pays them?
- Does sending or settling on a weekend or public holiday change the fee or the rate?
- What is the exact amount my recipient will collect, in their currency?
Ask for the answer to the last question in writing. It is the number you will compare against what actually arrived.
Your next step
Pick one upcoming transfer and run this process on it end to end. Request a quote, record the fee, the rate applied and the amount to be received, then confirm the transfer and ask the recipient what actually landed and when. If the received amount is lower than quoted, the difference will usually sit in one of the three places above, and the transfer summary plus your recipient's bank statement should be enough to identify which.
Keep the quote and the confirmation together. Discrepancies are far easier to resolve when you can show the figure you were promised and the figure that arrived.
If a business has represented a charge in Australian dollars and then charged you in a foreign currency, the ACCC's guidance on foreign currency and money exchange sets out why that may be misleading and what to do about it.
General information only. This article is general information about how international money transfers are priced and is not legal, tax, financial or migration advice, and it is not an assessment of any provider or product. Fees, rates, deductions and arrival times vary by provider, destination, currency and timing, and exchange rates move while markets are open. Verify current figures directly with your provider and the official sources before you commit to a transfer. Australian Cash is not a lender, broker, government body, regulator or comparison service.