Using behavioural insights to improve International Money Transfer calculators


Every year, Australians transfer an estimated $21 billion to family and friends overseas, making use of international money transfer (IMT) services. However, IMT pricing is complex and often not transparent for consumers. To assist businesses supplying IMT services, the Australian Competition and Consumer Commission issued best practice guidance, aimed at improving how IMT offers are presented to consumers. As a result, businesses now provide IMT calculators to allow consumers to better understand the costs associated with the transaction, and ultimately get better value for their transfer.

However, while IMT calculators can help, there is still room for improvement. Calculators differ from provider to provider, which means that comparing offers across different calculators is challenging. In particular, when a calculator adds fees (rather than subtracting them) it is harder to compare offers; no-fee transfers can ‘hide’ the cost of the transaction in a high foreign exchange rate (FX) margin; and the total cost of the transaction to the customer is often hard to determine directly.

The Behavioural Economics Team (BETA) worked with the ACCC to design and test changes to online IMT calculators that could help consumers choose better value offers. BETA designed seven new calculators to address the three key problems outlined above. BETA then ran online survey experiments with 5,673 Australians to test which type of calculator best helped consumers choose the best value offer. BETA found:

  • Consistently subtracting fees made it easy to compare offers and choose the best deal. When fees are consistently subtracted, the cost to the customer remains the same across providers and people can therefore rely on the amount received by the recipient – a common heuristic – to accurately guide them to the highest value offer. Consistently subtracting fees also made people more confident in their choices.
  • Providing ‘comparison rate prompts’ also improved people’s ability to choose the best deal. These prompts summarised the total cost of the transaction as a dollar value or per cent. Further, the prompts were also the most impactful when people were asked to judge the value from a single calculator (without a comparison). BETA found no evidence of ‘cognitive overload’ or other downsides when combining elements in a single calculator; e.g. adding prompts, FX margins, and consistently subtracting fees.
  • Based on these findings, subtracting fees and adding a comparison prompt would result in the highest performance both when consumers are considering a single offer, and when they are comparing offers. These results demonstrate the potential for improvements to IMT calculators further helping consumers choose the best deal when making international money transfers. Further research in the field – such as partnering with an IMT provider and evaluating the impact of calculators on real choices made by actual consumers – could be considered to test how the current findings translate to a real-world context

The final report was published in June 2024 and can be found here.

The above article was composed by the Consumers’ Federation of Australia Chair, Gerard Brody.