MEDIA RELEASE
28 November 2023
1 in 2 SMEs choose credit cards for big international purchases - wasting hundreds on fees
- 49% of SMEs use credit cards for overseas purchases of $2000-plus
- Convenience is the key reason for 63% of SMEs
- 31% don’t have time to search for other payment methods
A new survey has revealed almost half of Australian SMEs are sacrificing their hard-earned cash in fees and charges for convenience when making overseas purchases. Forty-nine (49) per cent admitted they use their credit cards when spending $2000 or more on a single international purchase, despite credit card fees of up to $90 for each purchase of this size.
The findings were derived from a survey of 202 independent business owners and decision-makers across the full SME spectrum commissioned by comparison service Money Transfer Comparison. The full survey results, including breakdowns across different business sizes and States, can be found here: https://moneytransfercomparison.com/australian-business-credit-cards-overseas/.
The three most common payment methods for overseas transactions are credit cards, bank transfers, and transfers from specialist international money transfer platforms. However, major banks charge transfer fees of up to $30 in addition to hefty exchange rate markups averaging 2.5 per cent on commonly currencies such as USD, NZD and GBP, and even higher on more exotic currencies. On credit card purchases, Australia’s major banks further slog card holders with currency conversion fees of up to 3.5 per cent. Specialised transfer providers such as Currencies Direct, TorFX and Moneycorp are the cheapest options[1].
Convenience, and a lack of time and knowledge are key reasons for credit card use
The survey revealed a whopping two-thirds (63 per cent) of SMEs automatically make big international purchases with a credit card for convenience, while 31 per cent say they don’t have enough time to search other payment methods.
Almost 20 per cent don’t think other payment methods would give worthwhile savings, 19 per cent don’t know of any other payment methods, and 18 per cent think other payment methods seem too complicated.
According to a recent report commissioned by the Australian Competition and Consumer Commission, international money transfers from Australia are high by global standards[2]. Credit card usage is also on the rise, according to a 2022 survey by the Reserve Bank of Australia (RBA), which shows a quarter of Australians favour their credit card in general for all payments[3].
Russell Gous, Money Transfer Comparison spokesperson, says. “There is a wide range of overseas purchases that businesses – particularly retailers and eCommerce traders – can make regularly. Much of Australia’s goods are sourced internationally, technology and suppliers can be more affordable when sourced overseas, and business travel from Australia has rebounded strongly in the last year.
“Our survey results speak volumes about the glaring information gap when it comes to making international purchases cost-effectively, and it’s a gap that’s hurting the hip pockets of SMEs. What almost half of SMEs fail to realise is that specialised transfer providers typically offer far better exchange rates than the big four Australian banks, with their transfer fees often 0.3 to 1.3 per cent depending on the size of the transfer. Additionally, they’re remarkably secure, and they’re easy to set up and use. Online spending is on the rise, and significant savings can be made by eschewing banks for third-party transfer sites.”
Micro businesses more cost-conscious, least likely to use credit cards
When asked if they would automatically use a credit card when making overseas payments of $2000 or more, 51 per cent of small businesses (11-50 employees) and 47 per cent of medium-sized (51-200 employees) businesses confessed they’re the most likely to do so.
Overwhelmingly, micro-businesses are the least likely to use their credit cards for overseas purchases of over $2000, at 60 per cent. This compares with 53 per cent of medium-sized businesses and 49 per cent of small businesses.
Please find the full study here: https://moneytransfercomparison.com/australian-business-credit-cards-overseas/.
ENDS
About Money Transfer Comparison
Money Transfer Comparison (moneytransfercomparison.com/Australia) is a global comparison website helping Australian businesses and individuals find the best rate in international money transfers to and from Australia. Money Transfer Comparison provides access to wholesale exchange rates across 14 money transfer companies, in a safe and secure way. Since 2014, tens of thousands of consumers and businesses worldwide have used Money Transfer Comparison to source international money transfers across more than 200 currencies. For more information, visit moneytransfercomparison.com/Australia
About Russell Gous
Russell Gous is a spokesperson for Money Transfer Comparison with vast experience in relationship management for brands such as WorldFirst and Barclays. With a keen eye for detail and a deep understanding of the payments industry, he aims to educate readers on the latest trends and payment solutions in the market. Leveraging his strong background in corporate banking, Russell plays a pivotal role in driving brand awareness and improving customer engagement.
Key Facts:
- 49% of SMEs use credit cards for overseas purchases of $2000-plus
- Convenience is the key reason for 63% of SMEs
- 31% don’t have time to search for other payment methods
Contact details:
Gillian Morgan | 0447 254 662 | [email protected]
Evie Maslen | 0432 485 901 | [email protected]