The Australian Competition and Consumer Commission (ACCC) currently has a Best Practice Guide for International Money Transfer (IMT) calculators. However, evidence suggests that online calculators may still be confusing for users.
This research tested a number of potential changes to IMT calculators that could increase competition and ultimately value for customers. The changes were designed to improve the communication of fees and exchange rate margins with users, enabling consumers to directly compare IMT services with each other. We found that consistently subtracting fees, and providing ‘comparison rate prompts’ made it easier for consumers to compare offers and choose the best deal.
ADDITIONAL TRIAL INFORMATION
Intervention start date
15 May 2023
Ethics approval
Human Research Ethics Committee (HREC) Humanities and Social Sciences, Macquarie University. Reference: 15504
Experimental design
This research consisted of two 8-arm randomised controlled trials embedded in a survey delivered online using the Qualtrics platform.
Interventions
This trial consisted of seven treatment arms and a control group. Interventions fell into three overall categories (see below). From these categories, we derived five treatment arms, with two additional arms consisting of combinations of these interventions. More detail on the categories and individual arms are included below:
1. Fee methodology
Transfer fees were either consistently deducted from, or added to the amount the user wishes to send. These arms were labelled ‘fee subtracted’ and ‘fee added’. Currently IMT providers use a mix of both methodologies.
2. Comparison rate prompt
The inclusion of a comparison rate at the bottom of the calculator, expressed as either a dollar amount or percentage e.g. “4.31% of the total you pay is taken by fees and the exchange rate margin.” These arms were labelled ‘prompt dollar’ and ‘prompt per cent’.
3. FX margin disclosure
The inclusion of the difference between the applied exchange rate and the mid-market rate. This arm was labelled ‘FX margin’.
4. Control group
Our control group provided no comparison rate prompt and no information about the FX margin. Within a scenario fees were presented as both added and subtracted to the exchange amount. This represents the way IMT calculators currently vary across providers.
5. Combinations
We tested two combination interventions. The first included both the prompt dollar and FX margin interventions and was labelled ‘combination 2’. The second included prompt dollar, fees subtracted and FX margin and was labelled ‘combination 3’. These arms were labelled to reflect the number of atomic interventions embedded in each.
Outcome measures
Primary outcome
At an individual level, the primary outcome was the proportion of correct responses given across the five scenarios. A correct response occurred when the participant selected the ‘best deal’ out of the four IMT calculators presented in a scenario. Thus, each individual’s outcome was a binomial trial where n = 5.
The ‘best deal’ was defined by the calculator that represented the highest ratio of converted dollars to total cost. For example a calculator that delivered 6907.38USD at a cost of 10,000.00AUD had a ratio of 0.69074. This was better value than one that delivered 6925.00USD at a cost of 10,045.00AUD with a ratio of 0.6894.
Individual level outcomes were averaged within treatment groups, to give the average proportion of correct responses by arm.
Secondary outcome
For our comparison experiment we included a ‘don’t know’ response option for each calculator comparison question. When calculating our primary outcome, ‘don’t know’ responses were treated as a wrong answer. However, we assessed ‘don’t know’ responses by treatment arm, presenting this data as a proportion.
We measured confidence using a single survey item after the experiment. Participants were asked to rate how confident they were that they could pick the calculator with the best value. It was measured with a three-level single-sided response frame (not at all confident; somewhat confident; very confident). We examined the distribution of individuals answering each of the three categories across treatment arms.
Our secondary judgement experiment had two outcomes based on two separate survey items. The first measured the proportion of individuals that are likely to seek more information, and the second the proportion that identified the presented bad deal calculator as such. These proportions were compared across treatment arms.
Sample size
5,673
