New Zealanders pay more for international money transfers than people in Australia, the UK, and the USA. The Commerce Commission has found that the fees charged to New Zealand consumers were opaque and poorly understood.

This is an issue for almost every Kiwi who will make an international money transfer or make a purchase online in a foreign currency. It is a particular issue for Pacific and other migrants that use international money transfer services very frequently to send money back home overseas, and as such they have a special need for price and fee transparency in this process. Banks charge a higher rate for acquiring (and therefore sending) international currencies than the prevailing mid-market rate in order to extract profit, and this effectively constitutes a ‘hidden fee’ when consumers want to make international money transfers through their bank. Because immigrant and diaspora communities use these services more frequently, they are more vulnerable to these hidden fees.

This bill amends the Financial Markets Conduct Act 2013. It will require greater transparency for fees charged on international money transfer services by:

• requiring fair conduct programmes to include effective policies, processes, systems, and controls to ensure disclosure of international money transfer fees;

• providing for regulations to be made prescribing specific disclosure requirements for fees and charges for international money transfer services, including how information must be displayed at premises or on a webpage (if the transfer is made electronically on-line).