There are lots of services promising to make international money transfer more affordable, without adding on the fees that banks charge. But people in New Zealand regularly sending money to Pacific countries have limited options.
Every day, people with New Zealand bank accounts transfer millions of dollars to other countries. For some, this might be the cash that funds an overseas holiday, or a longer period working remotely from overseas. For many others, that cash is remittances: money sent to friends and family, usually living in lower-income countries.
That spending adds up. In 2022, New Zealand paid more than $US889 million ($NZ1.44bn) to other countries via remittances. Just 0.2% of New Zealand’s GDP was remittances in 2023, while 45% of Tonga’s GDP, 28% of Samoa’s GDP, 9% of Fiji’s GDP and 15% of Vanuatu’s GDP was made up of remittances. This makes the Pacific Island countries, with high numbers of people living overseas, among the most reliant on money being sent from other places. With hundreds of thousands of Pacific New Zealanders, lots of that money comes from Aotearoa.
Of course, sending money across the world isn’t free. The days of travellers’ cheques are long over, and people are moving around the world more than ever before. Lots of people take the obvious route, and transfer money directly through their banks, but it’s not always clear what exchange rate is being used, and whether transfer fees will mean people at the other end have to pay too. For that reason, third-party solutions have emerged – Western Union offers in-person money transfer services, and PayPal is a digital option. Preliminary research into international transfer fees in the recent Commerce Commission report into banking found bank prices were often higher than operators like PayPal and money-transfer app Wise, as well as “corridor specialists”, businesses that offer money transfer exclusively between two specific countries.
Wise is often recommended in Reddit posts and seen in travel influencer affiliate links. Formerly known as TransferWise, the company was listed on the London Stock Exchange in 2021 after rebranding to the shorter, snappier name.
Currently, the service offers transfers to several dozen currencies, most of which feel geared towards people sauntering through Europe on their OEs or businesses paying international freelancers. Popular currencies on the New Zealand Wise website are the pound, euro and the Australian dollar, but there are a few other currencies that give an indication of where the big money is in international money transfer. The Philippines, Nigeria, Pakistan and Uganda aren’t go-to destinations for graphic designers trying out the digital nomad lifestyle – but pesos, naira, rupees and shillings are important currencies for people sending lots of money home. No Pacific currency is available, however – meaning that many Pacific people making money transfers can’t use the service.
Jack Pinczewski, Wise’s Asia-Pacific government relations manager, doesn’t want to profile the average Wise user. “You want to buy something that is cheaper overseas, you’re a family remitting money overseas, a small business with international customers, you’re travelling overseas and need to make a payment – everyone has international currency exposure.” In May, Wise paid for research that polled a representative sample of 1,053 New Zealanders about their money transfer habits. The survey found that 57% of people had transferred money overseas, and 61% of that group used an online service like Wise or PayPal to do it. Twenty-two percent of people had used an in-person service like Western Union and 54% of people said they had used their bank.
Pinczewski says that banks should be more transparent with customers, and that too many people are hit by hidden fees. “Banks are not providing the information customers need.” While there may be an upfront fixed fee, banks aren’t always using the mid-market foreign exchange rate, says Pinczewski. He mentions the recent Commerce Commission study into personal banking, which identified foreign exchange rates as an area of future work, although in an appendix to the report, it concluded that “these services do not appear to be relevant to understanding the wider competitive dynamics for personal banking services”.
Banks The Spinoff contacted disagreed with Pinczewksi’s criticism, saying there was information on each of their websites about international money transfers. “While we can’t comment on competitor transfer fees, our applicable fees and current rates are publicly available on our website. We regularly review our pricing and make changes as and when appropriate,” an ASB spokesperson told The Spinoff.
The ASB document detailing those fees and rates, which is in a PDF rather than a searchable page on the website, says that as well as a $5 fee for transfer, there may be other fees added by overseas banks. It does not specify how it determines the foreign exchange rate. Westpac’s rate is also in a PDF, but it specifies the percentage it charges on foreign currency accounts, and BNZ has its fees, but not exchange rates, online. Kiwibank and ANZ publish the exchange rates they use online, and ANZ covers the overseas bank fees for some countries to reduce the cost.
None of these, admittedly, is quite as slick as Wise’s filled-with-video site, where you can convert money from different currencies and see the exact fees and exchange rates being used. “We price our products transparently, showing the upfront amount,” Pinczeski says. He seems convinced that if banks and other third-party services were more transparent about pricing, no one would use them. He says that Wise’s focus on international money transfer – while for banks the service is just a sideline to their main game of mortgages – as well as a regularly updated set of technology, means it offers particularly low prices.
One indication of the depth of concern over fees for transferring money is the website Send Money Pacific, which is sponsored by the New Zealand and Australian governments through the “Empowering Migrants through Pacific Remittances” programme. The website allows users to enter amounts of New Zealand or Australian dollars and find out which method is the fastest and cheapest to convert to different Pacific Island currencies, similar to the Wise interface.
It’s a clear example of the costs and inconveniences of sending money overseas. At the time of writing, for example, sending $NZ500 through transfer service Orbit Remit would result in the recipient receiving 852 Samoan tala, but take three to five weekdays. The fastest options – XE and MoneyGram – would result in between 804 and 826 tala. The first bank that shows up is ASB, 13th of the ranked options, where the recipient would receive 796 tala and the transfer would take one to two weekdays.
“By educating people about their options for remittance payments and helping them to make better choices, this can help them get a fair deal and ultimately increase the amount of money being sent back to Pacific economies,” a spokesperson for the Ministry of Foreign Affairs and Trade (MFAT) told The Spinoff. It makes sense: remittance payments usually go directly to individuals, so enabling the payments to be as effective as possible can, in one sense, be thought of as a way to increase New Zealand’s international aid. Reducing fees for money transfer is in fact part of the UN’s Sustainable Development Goals. (#10: Reduce inequality within and among countries; 10.3 “eliminate discriminatory laws, policies and practices”.)
MFAT says that 71,682 exchange rate comparisons were made through the Send Money Pacific app and website between November 2021 and June 2024. With more than 400,000 people identifying as Pacific Islanders in the last New Zealand census, that number likely represents only a fraction of the people sending money home – but still, it’s a start. For everyone transferring money to the Pacific and beyond, the reality of repeated bank transfer fees is a regular reminder that the costs of supporting family don’t fall evenly, while big finance businesses keep making a profit.