Sending money overseas has become increasingly convenient and accessible, thanks to digital advancements in financial transactions. However, it’s crucial to exercise due diligence and adopt proper strategies to ensure the security and reliability of these transactions.
In this blog post, we will explore these most important tips and strategies to consider before sending money to a contact abroad, safeguarding your funds and protecting against potential risks such as cybercrime and fraud.
The Big Picture
A study released in Research and Markets revealed that Australia’s international outbound remittance businesses posted a 24 per cent growth to be valued at US$6.34 billion in 2023. The inbound remittances were estimated at $1.29 billion, a 14.3 per cent increase. Such a large amount may be partly attributed to expatriates in Australia sending money to loved ones back home, especially those who may have had some financial problems as a result of the COVID19 pandemic.
Some international remittance providers are also taking advantage of that growth to establish operations in Australia by expanding services Down Under, as in the case of the Nepalese company Hamro Patro. Others are partnering with Aussie firms, such as the Indonesian remittance firm Faspay landing a service deal with EzyRemit.
Research and Verify the Recipient
Before sending money overseas, conduct thorough research on the recipient. Verify their identity and ensure they are a trusted and legitimate contact. Take the time to confirm their contact information, such as their full name, address, and bank account details. This step will help minimise the risk of sending funds to the wrong person or falling victim to scams.
Use Reputable Money Transfer Services
Choose reputable and well-established money transfer services to send funds overseas; they are identifiable via customer reviews and its protective measures. Opt for services that offer robust encryption protocols and multi-factor authentication to protect your financial information.
As an added backstop, Forbes Australia recommends cross checking your preferred money-transfer provider for credentials with ASIC and AFCA, including a verifiable Australian Financial Services Licence and ABN number.
Be Wary of Unsolicited Requests
Exercise caution when receiving unsolicited requests for money from unknown individuals or organisations. Be sceptical of requests that involve urgent or emotional situations, as these are often tactics used by scammers. Verify the legitimacy of the request through independent channels before proceeding with any transaction.
Check Exchange Rates and Fees
Compare exchange rates and transaction fees across different money transfer providers, as they may affect the amount the recipient got. Consider using online platforms that offer transparent and competitive rates, ensuring your funds go further.
In a related tangent, check if your remittance provider has scrapped their money transfer fees. CBA made that leap in June 2023, waiving its $6 transfer charge to Transaction Account and Foreign Currency Account holders sending money through NetBank, the CBA app or CommBiz.
Take Cyber Security Precautions
When conducting digital transactions, implement cybersecurity measures to protect your financial information. Use secure and private networks, avoid conducting transactions on public Wi-Fi, and regularly update your device’s software and antivirus programs. Be cautious of phishing attempts and suspicious emails or messages requesting personal or financial information.
Consider Transaction Limits and Regulations
Familiarise yourself with any transaction limits or regulations imposed in Australia and the recipient’s country. Some countries have specific restrictions or reporting requirements for large transfers. Understanding these regulations will ensure compliance and prevent any delays or complications during the transaction. The limits may be specified in a transaction breakdown or the terms of service; read them well and seek clarification if needed.
Opt for Traceable Transactions
Choose traceable transaction methods, such as wire transfers or digital payment platforms, that provide a paper trail. Avoid sending funds through untraceable methods like cash or money orders, as they offer less protection and make it challenging to track the funds in case of issues or disputes.
Double-Check Account Details
Before initiating any transfer, double-check the recipient’s account details. Mistakenly entering incorrect account numbers or other details can result in funds being sent to the wrong recipient. Verify the accuracy of the information with the recipient directly or through reliable channels.
Inform the Recipient
Communicate with the recipient before sending funds to ensure they are aware of the transfer. Provide them with the necessary details, such as the expected amount, currency, and anticipated arrival date. This open communication helps avoid misunderstandings and ensures the recipient is prepared to receive the funds.
Keep Records and Confirmations
Maintain a comprehensive record of all transaction details, including receipts, confirmation numbers, and any communication related to the transfer. These records will serve as proof in case of any discrepancies or issues that may arise during or after the transaction.
Doing your Part
The above tips may possibly save your financial assets from exploitation by criminals. In March 2023, the Australian Federal Police launched TASKFORCE AVARUS, a joint initiative with AUSTRAC, the Australian Criminal Intelligence Commission, and the Australian Border Force to stop money laundering activities in Australia’s financial and property markets. The group is looking to shut down various existing methods to transfer illicit cash while taking down suspected depositories of money stashes.
Prior to the establishment of AVARUS, money remittances out of Australia have been challenging to pin down for any suspicious transactions, even at bank level. The danger attracted AUSTRAC scrutiny in late 2019 when it flagged Westpac Bank’s WestpacLite service for facilitating payments of 12 customers totalling close to $500k to finance paedophilia activities in the Philippines. The service was set up in 2016 through local bank partner BPI to help Filipino-Australian expatriates send money back home to loved ones in the Philippines. BPI scrapped the partnership, which also brought about Brian Hartzer’s resignation as Westpac CEO.
Conclusion
Sending money overseas requires careful consideration and the implementation of proper strategies to safeguard your funds and protect against potential risks. The above bits of advice may spell the difference between a successful remittance and a nasty pilferage of your hard-earned money.
DISCLAIMER: This article is for informational purposes only and does not constitute official financial advice. 2 Ezi has no working relationships with any companies mentioned, nor endorses or disparages their services.
