Australian businesses pay $5.74 billion annually in foreign exchange charges According to new research by the Australian-born payment company, Airwallex.
The company is urging the government to intervene and instruct the Australian Competition and Consumer Commission (ACCC) to prioritize this issue since the cost is affecting businesses and ultimately costing consumers.
Airwallex has carried out specific calculations of the effect on the retail industry which found that retailers are paid an average of $45,279 for additional fees per year. This rises to $49180 when it comes to online stores, in comparison with $5,786 for all types of companies.
The average cost for businesses is 3.97 percent more for foreign exchange costs through a bank, as compared to Airwallex.
“I see it every day where businesses are paying an ‘inertia tax’ for not shopping around on who they use for their international transactions,” Airwallex’s Account Management Lead, Nathan McNally said.
“Businesses are being scammed without even realizing it, and it’s high time that the federal government take action. Businesses are suffering and the pockets of consumers are suffering. Simple adjustments like requiring greater transparency for charges for foreign exchange would result in a deflationary impact through promoting competition.
“What could be the smallest change in the exchange rate can be a huge sum from your pocket. The staggering $5.74 billion expense to companies can be hidden within the balance sheets, hidden from view.
“Retailers are among the most affected business types due to they run business that require them to purchase items and materials from overseas as well as manage the shipping and logistics of moving goods around, and then pay for advertising and marketing before they even make the sale.
“At every step of the process, somebody is cutting the ticket to cover charges for foreign exchange. As businesses expand they remain with their company that they use for their financials and the plan they received when they first started.
“In this inflationary environment, we know businesses have to fight to keep their products affordable despite rising costs and one of the quickest ways to do that is to shop around on your international transaction partner.”
