BestExchangeRates.com https://bestexchangerates.com/info We make it Easy to Compare & Save on Exchange Rates and Currency Exchange Wed, 14 Aug 2019 04:37:16 +0000 en-AU hourly 1 https://wordpress.org/?v=5.2.2 https://i0.wp.com/bestexchangerates.com/info/wp-content/uploads/2019/01/ber-400.jpg?fit=32%2C32&ssl=1 BestExchangeRates.com https://bestexchangerates.com/info 32 32 144756853 AUD/GBP Between a Rock and a Hard Place – USD Strength https://bestexchangerates.com/info/aud-gbp-between-a-rock-and-a-hard-place Mon, 12 Aug 2019 06:32:04 +0000 https://bestexchangerates.com/info/?p=27400 The Australian dollar dropped 3.6% in the last month after further tensions in the US/China trade war when china was branded a “Currency manipulator” by the US for the first time in 25 years.

China, according to the Americans, was devaluing its currency to gain an unfair edge in retaliation for President Donald Trump’s surprise announcement four days earlier that he would impose new tariffs of 10% on around $300bn of Chinese imports.

After the PBOC allowed the USD/CNY rate drop below 7.0 America’s sharemarket suffered its worst day this year, emerging-market currencies including the Brazilian real, Indian rupee and South African rand, all fell. The Reserve Bank of New Zealand cut its benchmark interest rate by twice as much as expected and the Australian dollar fell to its lowest level in a decade.

Australia has a difficult position between the U.S. and China. The U.S. is Australia’s largest direct investor while China is Australia’s largest trading partner.

Over the same period the GBP/USD rate also dropped 3.8% due to the odds of a hard Brexit increasing with Boris Johnson taking up residence at Number 10 and the British economy looking like sinking into recesssion.

However for readers interested in the AUD/GBP or GBP/AUD exchange rates this has meant that the cross-rate been volatile and trading range-bound (side-ways) stuck between these two opposing forces.

“If it wasn’t for Brexit the Pound would probably be above AUD $2 value due to the weakness of the Aussie against the vast majority of the majors” says Ian Cragg from SendFX, “We are currently seeing US Expats living in Australia making the most of the 10 year USD to AUD high by bringing across savings to take advantage of the greenback strength”.

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Facebook’s Libra Is Not the Game Changer That’s Being Promised https://bestexchangerates.com/info/facebooks-libra-is-not-the-game-changer-thats-being-promised Thu, 04 Jul 2019 11:08:31 +0000 https://bestexchangerates.com/info/?p=27104 Facebook is on a mission to transform cross-border payments globally with the development of its own digital currency, Libra.

Facebook hopes to roll out Libra a year from now, in the summer of 2020, but contrary to the narrative being spun by crypto and Facebook enthusiasts, it’s unlikely to have anywhere near the industry-disrupting effects that are being touted.

Undoubtedly, Facebook has drawn inspiration from the successes of WeChat and Alipay — two apps which taken together have transformed the way money is spent, stored and transferred throughout China. But unlike these apps, which allow for the immediate transfer of China’s national currency, the yuan, Facebook is going international.

Per the sales brochure, Facebookers will be able to buy Libra with home currency, then instantly transfer funds to other Facebook users anywhere in the world, who can then choose to hold or resend the coin, spend on Facebook and associated apps, or convert Libra into local (foreign) currency.

Better still, as a “stablecoin,” Libra will be pegged to a basket of fiat currencies and will thereby avoid the wild volatility of bitcoin and its peers — volatility that has rendered those earlier cryptos inadequate as payment vehicles. And whereas bitcoin must compete to attract users, Facebook begins with 2.4 billion of them in the palm of its digital hand.

Sounds like a game changer for the payments industry! Except it’s not. There are simply too many problems with this model for it to work anywhere near as well as it’s being sold.

With two transactions to pay for, it might be that overseas transfers via Libra are more costly than those offered by existing non-bank providers

For serious overseas transfers, nearly all of Libra’s appeal hinges on how much the exchanges will charge for conversion from fiat currencies. Remember that an overseas transfer involving Libra requires two conversions. If you’re in Australia and intend to send money to the US, the first conversion would be from Australian dollars into Libra, and the second would be from Libra into US dollars. With traditional money transfers, you only convert money once — from Aussie to greenback.

With two transactions to pay for, it might be that overseas transfers via Libra are more costly than those offered by existing foreign transfer providers like XE, WorldFirst, TransferWise and CurrencyFair, all of which can process a US-bound transfer of AUD10,000 for 0.9 percent or less (as low as 0.6 percent). If fiat currency-to-Libra conversion costs turn out to be 0.5 percent each side, which isn’t unrealistic, it will be a more expensive method.

Libra will surely come into its own for smaller transfers sent by those who aren’t concerned about half a percentage point here or there, but instead crave convenience. When repaying the 200 bucks you owe your best friend, opening a Facebook contact list and clicking ‘Send’ will sure beat registering for an account with an online transfer company, waiting for account access, filling out payee forms with names and bank account numbers, and so on.

Nearly all of Libra’s appeal will hinge on how much exchanges charge for conversion from fiat currencies.

Will small Libra transfers dent revenues in the foreign exchange industry? Absolutely, but not as much as we’re being told. Already, a number of firms have transfer minimums — $500 or equivalent is typical, but this can rise tenfold for exotic currencies — making the small-transfer issue redundant in these cases, and of equal importance is the push by many of these firms into the much larger market for business payments. SMEs alone send $6-7 trillion across borders each year, and this is nearly 20 times retail volumes. To repeat what’s been said, nearly all of Libra’s appeal for larger transfers, including those by businesses, will hinge on how much the exchanges charge for conversion from fiat currencies.

Of course, the real potential for Libra — potential that eliminates half of the aforementioned conversion costs — is as a method of payment. Enthusiasts believe it could replace Visa and Mastercard at retailers and even domestic banking platforms like the UK’s Faster Payments Service (FPS).

If, instead of national currency, Facebook users could use Libra itself to pay for Libra-priced taxis and phone bills, groceries, coffee, cinema tickets and more, we might really be cooking, not only because we’d avoid that second leg of conversion fees but also because of what this would do for broader Libra sentiment and acceptance, and for our willingness to leave our wallets and contactless cards at home. But again, this is unlikely to become a reality.

To borrow an argument from Tom Holland of the South China Morning Post, because Libra’s value will continually fluctuate against national currencies, the price of goods bought with Libra will change day to day, and for many consumers, this alone will be sufficient reason not to use it.

“For Libra to work, companies would have to begin determining the prices of their products and services in Libra, and to avoid volatility between revenues and expenses, they would have to pay their staff in Libra. But neither companies nor workers would want paychecks in Libra [because] both would still have to pay their taxes in national currencies … [introducing] exchange-rate risk,” Holland says.

For Libra users, there’s also the serious matter of capital gains tax liabilities, which lawyers have warned will be a major barrier to adoption. In many countries, CGT will be due whenever Libra has increased in value relative to home currency and is then sold to fund large local purchases.

“In most countries … consumers will have to file a detailed tax return showing all their [Libra] transactions and the exchange rate at the time, and pay any tax due,” says Dan Neidle, a partner at law firm Clifford Chance. Speaking to the Financial Times, Neidle warned that heavy Libra users would likely find computing tax liabilities “a real challenge.”

Other important issues for both consumers and regulators include privacy controls and security of funds.

Getting Libra off the ground isn’t a foregone conclusion.

What’s absolutely clear is that Libra will bring to Facebook a level of scrutiny and regulatory oversight that it’s never experienced in its short history. In fact, getting Libra off the ground isn’t a foregone conclusion.

Breaking reports on Wednesday state that the US Congress has asked Facebook to immediately cease development of Libra to allow it time to investigate the risks it poses. And in the UK, when asked about Libra a fortnight ago, Bank of England Governor Mark Carney said: “We’re not going to allow a network that comes into place that is a network of criminals and terrorists.”

Speaking on Tuesday, another UK regulator, the Financial Conduct Authority’s Christopher Woolard, said: “The issues raised [by Libra] require deep thought and detail” and need to be examined by regulators and governments.

All said, Libra looks a game changer on paper but will probably struggle to find users when it’s brought to life given how entrenched national currencies are in our societies.

Large money transfers with Libra might be a goer if fiat-to-Libra exchange is sufficiently cheap, but even then, sophisticated remitters might still prefer the specialized services, support and advice offered by the industry’s top rated foreign transfer providers.

As a method of payment, it’s difficult to see why existing systems wouldn’t be preferable to Libra.

“Ultimately, Libra is not the competitor to central banks that boosters claim,” concludes Tom Holland, and that’s hard to disagree with.

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Australia Cuts Interest Rates to Record Low https://bestexchangerates.com/info/australia-cuts-interest-rates-to-record-low Tue, 02 Jul 2019 12:45:15 +0000 https://bestexchangerates.com/info/?p=27084 If ever proof was needed that foreign exchange markets price in economic developments ahead of time, it came on Tuesday when the Australian dollar strengthened after the Reserve Bank cut interest rates to a record low of 1 percent.

The RBA’s decision to cut rates for a second consecutive month induced an AUD rally from levels near US$0.697 to US$0.699. Against the New Zealand dollar, the Aussie leapt away from 3-month lows to levels just shy of NZ$1.05, and it even struck a 4-month high of £0.554 against the pound, albeit briefly.

Although the Aussie displayed strength following what should have been a bleak development (Australian interest rates are now the seventh lowest in the world), it was the worst-performing major currency on Monday and lost value throughout much of June, which demonstrates that the RBA’s decision was entirely priced in and that FX traders adjust positions and portfolios weeks and months in advance of big events.

“Buy the rumour, sell the fact,” as traders so often say — or in this case, the reverse.

Cheaper credit in Australia is warranted, economists believe, to stabilise the domestic economy and to get inflation humming back near its medium-term target, as well as to lend support to businesses which are reluctant to invest amid a US-China trade standoff that threatens Chinese demand for Australian commodities.

In a statement, RBA Governor Philip Lowe hinted that interest rates would be left at this record-low level for several months but said that policymakers were “prepared to adjust interest rates again if needed to get us closer to full employment and achieve the inflation target.”

“We will be closely monitoring how things evolve over coming months,” Lowe said.

Economists continue to predict a further rate cut this year and many are predicting two further cuts by early 2020.

This game of economic catch-up at the RBA is the result of a number of “errors and misjudgments” made by policymakers in 2018, writes PerCapita economist Stephen Koukoulas, and these errors include a “starry-eyed” view of the economy, a willingness to use monetary policy as a brake on house prices and an incorrect assumption that steady interest rates mark financial stability.

Inevitably, the Australian dollar will continue to track changes in expectations for future interest rates and for these “the unemployment rate will be a key indicator” going forward, says Fidelity’s Anthony Doyle.

A number of AUD forecasters continue to expect the Aussie between 5 and 7 percent weaker at year-end, at rates between US$0.65 and US$0.665. Exchange rates near the lower of these levels would take the currency’s losses to 20 percent since a high of US$0.813 was struck in January 2018.

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GBP’s Bright Start to the Year Is a Distant Memory https://bestexchangerates.com/info/gbps-bright-start-to-the-year-is-a-distant-memory Sun, 30 Jun 2019 13:36:20 +0000 https://bestexchangerates.com/info/?p=27044 The British pound’s bright start to the year is a distant memory.

Sterling began 2019 in great form, with gains against the US dollar and euro exceeding 5 percent between January and mid-March, and 4 percent against the Australian dollar. Since then, the pound has given back all of those gains and, with the last business day of the quarter now in the record books, is officially Q2’s worst-performing major currency, by some margin.

Amundi Asset Management’s Andreas Koenig told Bloomberg this weekend that Britain’s currency is now “impossible to forecast,” but clearly sentiment has worsened, with Leave-supporting Boris Johnson seemingly a shoo-in to win the Tory leadership race and consequently to become Britain’s next prime minister. A Johnson premiership would raise the probabilities for both no-deal and a 2019 general election, political analysts have said.

AUD to GBP - 3 month chart to 30 Jun
AUD/GBP - 3 month chart to 30 Jun

The pound’s unfortunate position is, of course, to the benefit of all other major currencies, including the Aussie dollar, which rallied on Friday to a 4-month high of £0.553. The New Zealand dollar achieved the same, at £0.529, and the euro did even better with its quote of £0.899 — the highest in 5 months. At £0.788, the world’s reserve currency, the US dollar, is close to its average rate over the past month.

In all cases, the pound is unlikely to receive much in the way of respite until November, when hopefully the UK-EU Brexit arrangement, or lack thereof, is known (Boris Johnson insists that the UK will not seek any further Article 50 extensions beyond the October-31 deadline).

A number of reputable sources, including the Bank of England, have predicted a sterling collapse in the event of no-deal. Per HSBC’s GBP forecasts, no-deal is likely to send USD/GBP and AUD/GBP soaring towards or beyond £0.9 and £0.6 respectively.

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Australians Swerve Thai Holidays with Exchange Rates in the Gutter https://bestexchangerates.com/info/australians-swerve-thai-holidays-with-exchange-rates-in-the-gutter Sun, 23 Jun 2019 16:24:46 +0000 https://bestexchangerates.com/info/?p=26987 The Australian dollar ended last week buying only 21.3 Thai baht, marking the lowest exchange rate since October 2008, and 24 percent less than the past decade’s average rate of 28.0 baht.

In 2012, AUD-THB averaged 32.2, meaning that holidaymakers at the time paid roughly A$124 for a typical 4-star hotel room, priced at ฿4,000; they now pay 52 percent more for the same room, which costs A$188.

The Australian dollar has been under tremendous pressure since February as traders have ramped up bets on aggressive interest-rate cuts by the RBA — bets that will only increase unless unemployment drops quickly or if there isn’t a thawing of trade tensions between the US and China.

In stark contrast, Thailand’s baht has been among the star performers of the year and it continues to defy expert opinions suggesting valuations have gotten too high.

The baht has been supported this year by Thailand’s large current-account surplus and following speculation that Thai stocks will soon be assigned a larger weighting in the MSCI Emerging Markets index, which would result in significant amounts of foreign capital entering Thailand.

Tourism data suggests that Australians are all too aware of what they’re now paying to experience Thailand’s beautiful islands and temples. In 2018, when AUD-THB averaged 24.0, only 790,000 Australians visited Thailand, yet in 2012 when rates were in the 32s and 33s, 18 percent more (930,000) made the trip to the Land of Smiles.

With exchange rates as they are, those from down under are on the lookout for better-value travel opportunities, the latest of which — and the undoubted surprise of 2018 — is Sri Lanka.

A single Australian dollar now buys 122.4 Sri Lankan rupees (LKR), 30 percent more than in September 2015 when rates fell as low as 94.0. The number of Australian visitors to Sri Lanka reached a record last year and numbers are up 400 percent over the past decade.

Holidays to Indonesia have also held up — the country welcomed a whopping 1.4 million Australians last year — as has the AUD-IDR exchange rate, which on Friday precisely matched the 10-year average rate of 9,810.

Unfortunately for Australian travellers, value-seeking will remain the order of the day because AUD forecasters expect more currency weakness before year-end and into 2020.

Commenting on the Australian dollar this weekend were analysts at Westpac, who reaffirmed an earlier prediction for depreciation worth 5 percent over the coming year.

Writing on the benchmark Aussie rate, AUD-USD, Westpac wrote: “If, as we expect, two cuts from the FOMC in 2019 stabilises growth … while Australia remains weak, then a further leg lower in the Australian dollar will be seen to around USD 0.66 in the first half of 2020.” The pair settled last week at USD 0.693.

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Canadian Dollar in the Spotlight After Surging to 16-Week High https://bestexchangerates.com/info/canadian-dollar-in-the-spotlight-after-surging-to-16-week-high Thu, 20 Jun 2019 19:43:13 +0000 https://bestexchangerates.com/info/?p=26955 The Canadian dollar has been the star of the past 48 hours. With oil prices up 10 percent since Monday and new data showing a big jump in Canadian inflation at a time when other major economies are faltering, it was only natural for currency traders to favour Canadian dollars on Wednesday and Thursday, forcing valuations higher.

Moreover, with pressure piled on to the US dollar following Wednesday’s admission by the Federal Reserve that the “case for [rate cuts] has strengthened,” the way was clear for CAD appreciation and buyers didn’t hold back.

The loonie has risen sharply to a 16-week high against the US dollar, at $0.76, and has reached its highest levels since the fourth quarter of last year against the British pound, euro, Australian dollar and New Zealand dollar.

Against the Australian dollar, such has been the loonie’s recent appreciation — at A$1.096, CAD/AUD is 5 percent higher than rates in mid-April — it’s now within a whisker of the important technical level of A$1.1, a level not seen since 2010.

Recent economic data has seemingly vindicated analysts at Scotiabank, who went out on a limb a month ago when they said that Canada’s economic health was “way better” than described at the time by policymakers at the Bank of Canada. Scotiabank went on to label Canada’s currency as “egregiously undervalued.”

Other reliable CAD forecasters include Citibank, which now foresees the currency buying US$0.77 in 6-12 months’ time, although Citi experts cite escalating trade tensions as a “major risk” to the forecast.

On matters of trade, Canada will need to ratify the United States-Mexico-Canada Agreement (USMCA) now that the Mexican Senate has approved the deal. With roughly 80 percent of Canadian exports going south of the border, FX markets will take a grim view of things should there be a long wait for this NAFTA-replacement to be agreed.

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TransferWise Gets Malaysian Remittance Licence https://bestexchangerates.com/info/transferwise-gets-malaysian-remittance-license Wed, 19 Jun 2019 20:08:30 +0000 https://bestexchangerates.com/info/?p=26945 Foreign exchange specialist TransferWise has been granted a remittance licence in Malaysia, it has been announced.

Before the year is out, Europe’s most valuable fintech will be able to offer money transfer services to Malaysians and it is expected to launch additional services, including its multi-currency Borderless Account, once further authorization from Bank Negara has been secured.

TransferWise customers have, until now, been able to send money to Malaysia — Asia’s sixth richest country — but not from. Malaysia will join Singapore, Hong Kong and Japan to become the fourth Asian nation to offer the popular service.

Unlike banks, which tend to couple a transfer fee with a heavily padded exchange rate, TransferWise offers transfers at the “real” exchange rate — the interbank or “mid-market” rate — with only a small, transparent fee.

Though actual costs are unavailable at this early stage, BER expects TransferWise to slash 75 percent or more from the cost of sending Malaysian ringgits to the UK, Europe, the US, Australia and many other destinations. At present, banks are known to levy charges (advertised or hidden within the exchange rate) worth 4-7 percent on transfers of RM5,000 to these countries.

Other effective ways to send money from Malaysia include the OFX and InstaReM platforms. Other well-known remittance brands operating in the country, such as Western Union, are significantly more expensive.

Key to TransferWise’s access to the Malaysian market has been Bank Negara’s willingness to permit eKYC (electronic Know Your Customer) verification. Since TransferWise is a digital company with no branches or other physical outlets, customers open accounts speedily by submitting documents online or via their smartphones.

The buying power of the ringgit has dropped considerably in recent years — since 2013, MYR losses have averaged 20 percent against the US dollar, euro, rupee, Singapore dollar and Philippine peso — which has meant that goods bought by Malaysians from overseas have been expensive and that remitted earnings of foreign workers have bought less home currency than hoped for. This makes the arrival of cheap foreign transfer providers like TransferWise — firms that squeeze every ounce of value from currencies — a much needed and welcome entrant into Malaysia’s financial services landscape.

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Banks Charge Small Customers 25 Times More for FX, Research Shows https://bestexchangerates.com/info/banks-charge-small-customers-25-times-more-for-fx-research-shows Mon, 17 Jun 2019 20:30:29 +0000 https://bestexchangerates.com/info/?p=26930 It’s not only on spot foreign exchange transactions that banks massively overcharge their smaller customers. New research from the European Central Bank shows that banks charge small businesses up to 25 times more for FX forwards than they charge larger, more sophisticated corporates.

The paper outlining the ECB’s results is yet to be published but the Financial Times understands that researchers, led by Professor Harald Hau of the Geneva Finance Research Institute, have analyzed 500,000 EUR/USD forward agreements offered by 200 banks to a spectrum of business customers, which included multinationals and smaller import-export firms.

With a forward, businesses fix an exchange rate today for a money transfer that will take place many weeks, months or years from now. Forwards are secured with a small deposit and are used for hedging against adverse currency movements and make budgeting easier because of the exchange-rate certainty they offer.

Per the FT, data shows that many businesses are being charged 50 basis points (0.5 percent) for forward contracts that are costing the largest customers amounts nearer 2 basis points. The findings, therefore, paint yet another shocking picture of price discrimination in the foreign exchange industry.

“The elephant in the room is that dealers systematically and consistently overcharge clients who don’t have currency trading expertise,” Professor Hau told the FT.

Hau’s team estimates that, on average, European banks are profiting to the tune of €600 million each year because of discriminatory pricing.

“The price discrimination occurs systematically against the less sophisticated market participants, namely small export and import companies,” Hau said.

Until a regulatory change in 2016, the details of bank charges for currency conversion were unavailable in Europe, and though overcharging had long been suspected, estimates for this have, until now, been inaccurate.

“For the first time we can measure the quality of the market for different participants and what we see looks terrible from a public policy point of view,” Hau said.

Rather than setting prices based on product features, such as the length of an FX forward (i.e., how far into the future would a customer like to fix an exchange rate), data shows that pricing is determined to a great extent by company size, or on the perceived level of a customer’s FX expertise.

So great is the cost of hedging with these forwards that many SMEs are choosing to take their chances with the markets. Unlike insuring a car, insuring against an FX move that might make a supplier payment in 6 months’ time more expensive isn’t compulsory, and data suggests that customers know that bank-priced forwards offer poor value and are voting with their feet by staying unprotected.

Gambling on the value of future foreign-currency payments isn’t necessary, however, because of cheap FX providers like WorldFirst and OFX, which sell forwards at far lower rates than the banks do.

Another obvious lesson to be learned from the research is that price comparisons are absolutely essential. More than half of the 10,000 businesses that bought forwards requested quotes from a single dealer, and these businesses paid, on average, 14 times more than those that requested quotes from 5 dealers or more.

For any type of money transfer, a comprehensive comparison calculator is essential to know how much could be saved. Owing to the digital revolution, a number of FX providers now offer currency conversion at a fraction of what’s charged by well-known lenders.

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Booming Commodities Can’t Save Australian Dollar https://bestexchangerates.com/info/booming-commodities-cant-save-australian-dollar Sat, 15 Jun 2019 21:05:15 +0000 https://bestexchangerates.com/info/?p=26906 The Australian dollar has, for now at least, decoupled from the commodity that once heavily influenced its value.

In international markets, prices for Australia’s largest export, iron ore, are rocketing. On China’s Dalian Commodity Exchange, futures contracts for September iron ore delivery were quoted last week at 797.5 yuan (roughly AU$167.50) per tonne — the highest price since iron ore trading was introduced on the DCE in 2013.

And yet the Australian dollar has slumped in recent days to its lowest levels since January against SGD, CAD, JPY, CHF and EUR, and to a lowly USD valuation of just US68.7¢ — 16 percent less than its best rate from last year.

The Aussie has been offloaded as investors have ramped up bets on aggressive interest rate cuts by the Reserve Bank of Australia. These cuts, investors believe, will be necessary in light of persistently soft domestic data, above-target unemployment and the fallout from a US-China trade standoff that shows no sign of nearing an end, or even easing.

Bond market pricing now implies a two-thirds probability of the RBA cutting rates by 25 basis points next month to a record low of 1 percent. Earlier this month, the RBA reduced the cost of borrowing for the first time in 3 years.

While lower interest rates might be great for Australian businesses and those hoping to borrow, they bode poorly for the Australian dollar, which already fails to pay a return that matches with its perceived “risk currency” status.

AUD forecasts from GSFM, ANZ, Capital Economics and Westpac all suggest further depreciation in the second half of this year. Against the US dollar, readers should expect rates between US65¢ and US66¢ before the year is out, analysts have said.

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Revolut Card in Australia – Review https://bestexchangerates.com/info/revolut-card-australia-review https://bestexchangerates.com/info/revolut-card-australia-review#respond Sat, 15 Jun 2019 16:58:01 +0000 https://bestexchangerates.com/info/?p=26889 Revolut has finally launched its service in Australia. Up to 20,000 Australians — the first that joined the company’s long waiting list — now have access to an e-money account that provides free international money transfers, a multi-currency account and travel card.

Revolut is among the world’s hottest fintechs, having already secured 5 million customers in Europe and valuations near $2 billion.

The company has said that it will run its Australian operation from Melbourne but will also have presences in Sydney and Perth.

From Revolut’s multi-currency wallet, “Standard” account holders can send money to bank accounts around the world in 110 currencies at the interbank exchange rate — that’s an exchange rate without the usual markups — and without transaction fees, subject to a monthly transaction limit of AU$9,000.

For higher-value payments, Revolut offers a “Premium” account, costing AU$10.99 per month, for which no-fee international transfers are unlimited.

Since banks usually apply costs worth 3–5 percent on such transfers, money saved with Revolut and other cheap foreign transfer providers can be substantial.

“Sending money between the UK, Europe and Australia has traditionally been costly and time consuming,” the man in charge of Revolut’s APAC expansion, Will Mahon-Heap, said in a statement. But no more, he implied, when he said that Revolut was “tearing down financial borders and will keep money in the pockets of our customers.”

From the Revolut app, users can make instant transfers to phone contacts, can target improved exchange rates using Auto Exchange and can receive card payments from non-Revolut users by way of payment links. Shopping internationally is also a breeze using Revolut’s multi-currency travel card which grants free overseas ATM withdrawals up to AU$350 per month (AU$700 for Premium accounts).

Perhaps the most disliked feature of Revolut is the customer support, which comes in the form of in-app text chat — Revolut offers no phone or email support, not even for business customers.

Due to its successes in Europe and the hype that surrounds the service, Revolut is expected to steal market share from Australia’s established financial services firms at a much faster pace than local neobanks such as Xinja, Volt and 86 400.

“[Revolut] is a different animal,” a source at a major bank told the Australian Financial Review. “This could be a bigger threat [to the banking sector] than the home players,” the source said.

Revolut has also announced the addition of Apple Pay as a funding option but, for the time being, only for users in 15 European countries: the UK, France, Poland, Germany, Czech Republic, Switzerland, Ireland, Belgium, Spain, Italy, Sweden, Denmark, Norway, Finland and Iceland. Those in Australia will have to wait for Apple Pay and must instead add money to Revolut balances with a domestic debit card or bank transfer.

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