Australians are sparing no effort in their quest to find savings in essential spending – including fees on the payments themselves, according to a new Money Transfer Comparison survey.
With the population making over 10 billion debit and credit card purchases, worth over $670 billion, each year, surcharges on credit cards, payment apps and even direct debits automatics can add up considerably over 12 months.
Money Transfer Comparison commissioned a survey of an independent panel of 1000 Australians to find out if individuals were looking to save on payments over the next 12 months. He revealed that a whopping 76 percent of respondents are aware of payment fees and are starting to save money in this area.
Australians use a range of methods to make payments. Nearly 70% use BPAY, four in five (81%) have automatic payment arrangements in place, and more than 7 million use PayPal. Together, they earn around $250 million per month in credit card and charge card transactions, and transfer $21 billion in funds internationally each year.
According to the survey, the Money Transfer Comparison found that more than half (53%) of respondents plan to reduce credit card surcharges by paying more bills via BPAY, PayPal or e-Transfer direct. A third (34%) will research to find the lowest money transfer fees and exchange rates when making international payments. Around a quarter (27%) will actively reduce missed payment fees by setting up direct debits from their bank account for certain regular payments.
The survey found that the younger the individual, the more likely they are to seek savings on their payments. Nearly nine in 10 18-30 year olds (87%) will proactively change the way they pay for expenses and goods, compared to 79% of 31-50 year olds and 68% of over 50 year olds.
Specifically, younger Australians (18-30) will seek out the cheapest money transfer services (47%), try to avoid paying their bills with a credit card (56%) and set up automatic debits to avoid missed payment fees (35%). In comparison, only 24% of over-30s will set up direct debit payments.
It appears that bill-sharing apps have a much larger audience among those under 30, with 17% of 18-30 year olds planning to use these services, compared to just 9% of 31-50 year olds and 3% of over 50 years old.
The survey found that, of the top five states, the Sunshine State is the most financially savvy, with 80% on the verge of changing their payment methods for goods and bills. More Queenslanders (58%) than residents of other states will pay their bills via BPAY, PayPal or direct electronic transfer to avoid credit card surcharges; and 33% will have set up direct debits for certain payments.
However, more residents of NSW and Victoria (36 and 35% respectively) will seek the cheapest services for international money transfers. More and more NSW residents are also likely to use ‘split bill’ apps when dining out with friends and work colleagues.
“Fees and charges on payments are an often overlooked area for saving money, as they are usually buried in the fine print, making it difficult for people to really see how much their digital payments are costing them,” says Alon Rajic, founder and managing director of the money transfer comparison.
“We are delighted to see that the majority of Australians are starting to look more closely at fees every time they make a transaction. Unfortunately, no transaction is completely and always ‘free’.
“The goal should be to choose the cheapest, but also safe and convenient payment method,” he says.
“For example, many merchants who accept credit card payments charge a surcharge for such transactions, with rewards cards such as AMEX incurring the highest rate.
“Even BPAY and EFT transactions can incur fees, either from the bank in the case of BPAY, or from the merchants in the case of EFT. When making international money transfers, there are two types of fees to be aware of transfer fees and exchange rate fees, and you can find services that don’t charge any transfer fees,” says Rajic.
“With so many money transfer and payment options available, it’s hard to decide which option is best for different types of expenses.”