‘The evil this bill will resolve’: Wise backs Labour bill that wants to end hidden foreign exchange fees on international money transfers

Money transfer company Wise has appealed to the New Zealand Government again to mandate price transparency for international money transfers.

The Governance and Administration Select Committee is currently considering Labour Party MP Arena Williams’ Financial Markets (International Money Transfers) Amendment Bill. 

Wise's Asia-Pacific Government Relations Lead Jack Pinczewski told the committee on Wednesday that the “more insidious part” of fees in international money transfers is the hidden foreign exchange (FX) fee. 

“This is the fee that you do not see in any documentation about these money transmissions; you will not see that the FX margin is included as a cost. It's not listed as a fee; it's not listed as anything to the consumer other than this is the FX rate that you're getting and it could be anywhere up to 6%, 7% or 8% or more,” he said.

“And that is the evil that this bill will help resolve.”

Pinczewski told the committee that banks generally charge an average FX margin of between 2.5% and 4.5%, and in comparison, Wise charges an FX margin average of 50 basis points across 7,000 currency pairs.

He said the difficulty with the present situation is that a person sending money internationally isn’t made aware of the discrepancy between a benchmark rate and the FX rate being charged to them by their bank or international money transfer.

“That element of price discovery is absolutely critical for a competitive market. For a person to make that decision, they need to have it illustrated to them, preferably in dollar terms, at the point of transmission,” he said.

“We think that this bill will drive a large amount of competition in the market by giving people the knowledge and the necessary information that they need to make the best decisions themselves.”

A litre of milk

Williams’ bill was drawn from the Member's Ballot in May 2025 and passed its first reading in April this year. 

While New Zealand First, ACT, the Greens and Te Pāti Māori have all backed the bill, National has been the only political party to oppose it. 

During Wednesday’s meeting, National MP Tim Costley asked Pinczewski if a business was charging a higher marginal rate, why that wasn’t just a cost of doing business

“Like if I go to the supermarket, I don't know how much profit they build into a product, you know, why would we legislate that they have to tell you their profit margin when other companies don't?”

Pinczewski said Wise wasn’t asking that the Government legislate requiring people to disclose their profit margins but rather to legislate that international money transfer providers have to inform people of all the costs attached to a transfer.

“So you're right, we don't ask people to give us the profit margin on a litre of milk, but when we're contemplating what it is that consumers are getting, I would say that they're actually getting less milk,” he said.

“What you're actually legislating for is to let people know when they go into the supermarket that a litre of milk is actually a litre of milk.”

‘Look under the hood’

Williams’ bill followed the Commerce Commission's market study into competition for retail banking services, which raised concerns about international money transfers, even though they weren't part of its narrow terms of reference focused on deposit accounts and home loans.

Williams is calling for full disclosure of all fees, commissions and exchange rates before an international money transfer is made, which would require banks and other money transfer services to be much more upfront than they currently are about the fees they charge for these services. 

She told the committee on Wednesday that part of the issue is there isn’t one regulator responsible for overseeing international money transfer issues and the money transfer companies themselves.

“It is something that has sort of fallen through the cracks of who is responsible for it,” she said.

“The total size of the transfer market in New Zealand at the end of this decade will be close to a billion dollars just in the fees that we pay.”

According to Williams, about half of those fees were small business and business fees. 

“And then the other half includes a good whack of consumer fees, around $200 million,” she said.

Williams said the extra fees were a “net drag” on the country’s productivity and the prices consumers are paying.

“That's not going back into their mortgages; it's not going back into these car loans. It's not going back into those things that help them with the cost of living and make sure that they can pay their bills at the end of the week,” she said.

“I think this is an issue where we need greater transparency so that the rules are fair for everyone. And that's why I've asked you to take a look under the hood,” she said.