Labour’s Arena Williams says her bill seeking full disclosure of international money transfer costs would lead to a more competitive market as it receives support across political parties - except from National

New Zealand First, ACT, the Greens and Te Pāti Māori are backing a Labour bill calling for the full disclosure of international money transfer costs, after its first reading in Parliament.

 Put forward by Labour commerce and consumer affairs spokesperson Arena Williams, the Financial Markets (International Money Transfers) Amendment Bill was drawn from the Member’s Ballot last year. It would require banks and other money transfer services to be upfront about their fees, exchange rates and commissions.

"The price you see at the shelf should be the one you pay at the till - that applies to international money transfers too," Williams said in Parliament on Wednesday.

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

National, however, opposed the Bill with MP Nancy Lu saying while she acknowledged its intention, she didn't think it necessarily adds any benefits as people ultimately pay one final cost.

“It’s not improving any safety measures with international money transfers. It is not improving any speed of making any international money transfers," Lu said.

The Bill; “will not do anything to reduce the cost of making such international money transfers”, she said.

On the contrary, Lu said, if the Bill goes through and becomes law, financial providers would have to do extra administrative work to provide cost breakdowns.

This Bill would add extra layers of rules which would lead to additional costs for consumers, she said.

National MP Dan Bidois pointed to the conduct of financial institutions regime which he said; “required all financial institutions to operate fair and transparently towards consumers and the products they offer”. He also pointed to the Financial Markets Conduct Amendment Bill which clarifies obligations for financial institutions.

However, Williams said changes proposed by her bill would mean prices were known, noting money transfer services were advertising zero fees.

“What they mean by zero fees is when you transfer the money to your mum you’re looking after in Samoa, to your family in The Philippines, to someone you are transacting with to buy a holiday experience when your family visits in November, you will be charged a fee but you won’t know it upfront.”

“In fact you might not know it until the money arrives in that person’s account,” Williams said. “That is not fair, that advertising shouldn’t be allowed. That is happening in front of our eyes but we can navigate it.”

“New Zealand First and ACT have come to the party to make things clearer for consumers, but National continued their inaction on increasing costs," Williams said.

Williams told interest.co.nz that while the Bill doesn’t propose to cap fees, it proposes that competition should sort this out.

By having details properly disclosed, there would be a much more competitive market for these fees, she said.

Williams said New Zealanders pay more for international money transfers than people in Australia, the UK and the US.

She said an estimate that was submitted to the Finance and Expenditure Committee’s inquiry into banking showed, according to industry data, there were $743 million a year in hidden fees.

Asked about the Bill before it had its first reading, Commerce and Consumer Affairs Minister Cameron Brewer told reporters “we want more transparency around cost and pricing and the like”.

But as for Williams' Bill, Brewer said; "I have no comment on that at this stage".

The Bill will now be considered by the Governance and Administration Select Committee.