Overseas debit card spending surged in December as more banks slashed foreign transaction fees and charges.
The Reserve Bank of Australia (RBA) today released its credit card and debit card data for December 2019.
In December alone, 15.7 million overseas debit card transactions were made, comprising a total of $1.10 billion worth of transactions.
After accounting for seasonal factors (given the fact that December is the busiest time for Aussies travelling overseas) there were 14.8 million overseas debit card transactions worth $1.05 billion worth of transactions.
The seasonally-adjusted value of overseas debit transactions in December represented a 4.44% increase over November's data, the fastest monthly increase since April 2018. Compared to December 2018, it was 21.6% higher.
The surge comes amid the proliferation of debit cards in Australia with 0% foreign transaction fees and $0 overseas ATM withdrawal fees.
One such debit card is Up Bank's 'Everyday Account', which last month announced the removal of its $5 overseas ATM withdrawal fee.
Up Bank co-founder Dominic Pym told Savings.com.au Up's debit card product has been used in 175 countries since its launch in 2019, with more than 20,000 of its customers making purchases from overseas merchants.
"International fees are often not trivial, and can add up quickly," Mr Pym said.
"Many banks and card providers will charge annual fees, once-off fees, recharge or withdrawal fees, purchase fees, FX (foreign exchange) conversion fees, FX rate markup, international ATM fees, and more.
"It’s not simple to estimate the savings, but assuming most banks that charge fees are charging within the 2-3% range, the savings for Up customers is already in the hundreds of thousands of dollars."
New Payment Platform transactions also up
New Payment Platform (NPP) transactions also jumped in December after holding relatively steady in November.
Nearly $36 billion worth of NPP payments were made in December ($35,836,900,000), representing an 8% increase on November, although this figure was not seasonally-adjusted. NPP payments in November were only up 0.56% on October.
'Osko' NPP overlay transactions represented nearly $34 billion of December's figure.
NPP launched in February 2017 and allows customers near-instant bank transfers, either via Osko or 'Pay ID', where users can use their phone number or email to transfer, rather than BSB/Account number.
Nearly 100 financial institutions are taking part in NPP, including the big four and other major institutions.
Notable institutions not yet on the platform include Citi, ME Bank, and HSBC.
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