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Transferring Money - Australia - Indonesia

In the 2011 Australian census, 48,836 Australian residents declared they were from Indonesian ancestry, with the majority having been born there. What is more common, perhaps, is travel in the other direction. Pre-pandemic, over 1.3 million Australians would visit Indonesia, be it for the Jakarta sun or the Bali fun.

Another cause behind Australians heading to Indonesia is because of investment. In 2020, the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) commenced, making Indonesia-Australian investment relations all the stronger. Mostly a response to the damage COVID-19 had done to the economy, the partnership was a strategy of recovery - focusing on regional stability and boosting economic relations.

The Indonesian property market continues to grow, with residential property prices increasing each year. It’s an attractive investment for Australians, particularly those priced out of their own domestic property market. The same goes for business investment. Australia’s business economy is solid, but it’s highly developed. Indonesia, on the other hand, is an emerging market economy that is expected to grow 5%+ year on year whilst much of the developed world faces a recession.

For this reason, an increasing number of people are looking to send money from Australia to Indonesia, but it’s also common for expats to send money from Indonesia to Australia, too.

Moving money overseas

With this prosperous business outlook between Australia and Indonesia, the biggest resistance they face can be shifting funds across the border. It may seem simple enough (the process of sending money to an international bank account) but it can be an issue when it comes to business and investment.

When profits matter, so do the costs. High street banks, which are commonly relied upon for transferring large amounts of money across borders, are arguably the most expensive way to send money. Australian banks, in particular, are pricey, often charging customers flat fees and high exchange rate markups. The typical ~$30 fee may not be an issue with a large transfer, but it’s the 3-4% exchange rate markup that is the real issue.

This would mean that a $100,000 transfer money from Australia to Indonesia (or vice versa) incurs a $3,000 to $4,000 fee - just for getting the funds from one bank to another. When factoring in other costs, like estate agent fees and translation-focused law firms, it can make an investment suddenly unviable. Some banks do have a slightly more preferable rate than this, but it’s difficult to find which ones are offering the best rates because the markups aren’t consistent or all that transparent.

Money transfer providers: An alternative

So as we can see, banks are far from ideal, and it is instead money transfer providers that are best for transferring money from Australia.

Money transfer providers are seen as a very good alternative to using banks. Whilst it’s not completely frictionless to send money between Indonesia and Australia, it’s as close as it gets.

First and foremost, exchange rate markups at money transfer providers are usually closer to 0.5%, which reduces that ~$3,500 fee down to ~$500. Secondly, there will likely be no fees either, making it easy to get quotes and receive price breakdowns.

This alone is enough to blacklist the use of banks for investments and overseas transfers, but it actually runs deeper than just money.

The real value of money transfer providers is in regards to the customer service they provide. Making a large transfer is one thing, but when it’s for investment purposes, suddenly there are a lot more questions to answer.

Money transfer providers are set up to provide dedicated dealers - that is, a dedicated person to oversee all of your dealings - and help facilitate the transfers for you. Whilst you could use an app in theory, like with an online bank, a phone call can improve your chances of saving money.

For example, it may be that your property purchase isn’t going to finalize for another month, but because of Australian laws, you know that it will 100% go through. In this case, a dedicated dealer may propose that you lock in your exchange rate today through a hedging product, as this will protect you in the event of exchange rates fluctuations during the next month.

Or, if the deal isn’t 100% going to go through, but it looks highly likely, then a different kind of hedging product may be suggested; one that isn’t set in stone. The point is, you don’t need to know about all the different hedging products and FX solutions, they will walk you through it and execute it for you - for free.

When we look at banks on the other hand, they’re borderline useless when it comes to currency handlings. They will likely provide zero expertise on the topic, and you will speak to a different person each time from their phone support farm.

Who to choose when sending money between Australia and Indonesia?

Before looking at specific companies for a transfer, a more important first step is to determine what kind of transfer you’re after. If it’s a fast, painless transfer on your phone with no need for over-the-phone support, then Wise offers some of the most competitive rates for Indonesia. It’s extremely convenient and fast. With it being so common for expats transferring money to an Australian bank account from abroad, Wise’s popularity has become unrivaled.

Wise might be the best money transfer service in Indonesia, but for very large transfers, it can be restrictive. They’re not quite as secure for sending tens of thousands of dollars because it’s not what they’re designed to do, and there’s no phone support if anything goes wrong. Instead, it’s best to choose a firm designed for more sophisticated transfers.

There are tons of these available, but an Australian-based one that focuses on the Asian market is ideal. Firstly, because they will have offices there, with phone support times that align with your own. But it also shows a sign of expertise, and they’re far more likely to offer competitive exchange rates for Australian-Indonesian transfers.

So when looking to transfer money from Indonesia to Australia or vice versa, OFX fits the above criteria for large transfers, but other companies like Torfx, Send, and FlashFX are also worth considering.


This article is generously provided by Simlee Paamon.


Last updated August 29, 2022