The ACCC has announced it will hold an inquiry into the supply of foreign currency conversion services in Australia.
A report is to be delivered to the Treasurer by 31 May 2019.
The ACCC has released an issues paper seeking feedback on a range of issues, including:
- pricing of foreign currency conversion services in Australia;
- costs to supply foreign currency conversion services;
- the nature and extent of competition, and whether there are impediments to effective price competition in the sector;
- how prices are communicated to customers and factors limiting the ability of consumers to effectively compare prices.
The Productivity Commission (PC) raised concerns about foreign currency conversion services in its Inquiry into Competition in the Australian Financial System. In its final report, the PC found that consumers may have difficulty understanding the different types of prices charged for international money transfers. The PC recommended that the ACCC review the transparency of fees for these services, with a view to investigating whether additional disclosure methods could improve consumer understanding and the comparison of fees for different services
ASIC proposes to focus on the nature and extent of price competition for foreign currency transfers and for foreign cash, as defined below.
Foreign currency transfers involves the transfer of money from an account in Australia, to an account in another country. As part of the service, the money transferred is converted from Australian dollars to the currency of the destination country, or another foreign currency. For example, sending money to the account of a family member overseas via a financial institution or remittance service provider.
Foreign cash involves the exchange of foreign currency banknotes and coins in Australia for Australian dollars, as well as the exchange of Australian banknotes and coins in Australia for foreign currency. For example, obtaining foreign cash in Australia before travelling overseas at a local bank branch or an airport, or using foreign cash to obtain Australian dollars upon return.
ACCC also proposes examining Australian consumer and small business use of debit and credit cards to make overseas purchases or access foreign currency through an overseas ATM, and their use of stored value or prepaid travel cards for foreign currency transactions.