How to Transfer Funds Globally

What are your options for transferring funds overseas for educational, investment, or other purposes? What are the benefits, limitations, and disadvantages of each method?

Cash

Carrying good old cash is a simple and easy way once you have converted to the currency of your choice.

Cost/Fees:

  • Only the foreign exchange (Forex) conversion cost.

Pros:

Cons:

  • You need to physically move the money to the destination.
  • Safety especially if carrying large amounts of cash.
  • Many countries have limits to the amount of cash you can bring in/out (typically ~USD10k or equivalent).

 

Foreign Banker’s Cheque

An old school way to move funds on a piece of paper. Also known as bank cheque, bank draft, or tellers’ check.

Cost/Fees:

  • Banker’s Cheque Purchase: RM2-5.
  • Agent Fees: ~USD25-30.
  • Receiving Bank Fees: dependent on bank.

Pros:

  • Guaranteed by bank.

Cons:

  • It may take a few weeks for the banker’s cheque to clear, unless the bank agrees to provide value straight away.
  • Exchange rates may affect the fee so the receiver may get less (or more) money.
  • Some recipient may not trust banker’s cheque as there have been cases of fake cheques.

 

Telegraphic Transfers

An electronic method to transfer funds. Most banks use SWIFT (Society for Worldwide Interbank Financial Telecommunication). Also known as teletransfer (TT)/wire/cable.

Cost/Fees:

  • Transfer Fee: RM10-15.
  • Agent Fees: ~USD25-30.
  • Receiving Bank Fees: dependent on bank.

Pros:

  • Shorter period of time (relatively) of 1-2 business days to reach the receiving bank and immediate payout once received.

Cons:

  • TT transfers are processed within certain cut-off times by banks. If you miss the cut-off time, your processing will be delayed 1 business day.
  • Although rare, TT transfers can occasionally get lost.

 

Debit/Credit Cards

If your receiver, can receive (or bill you) via credit card, you can transfer funds using your credit card, or even your debit card.

Cost/Fees:

Pros:

  • Fastest processing period which is near instantaneous once approved.
  • Bypass agent fees.

Cons:

  • Not all recipients can receive funds via credit card payment.
  • Your debit/credit card charge may be blocked by your bank especially if your bank is very careful and/or it is your first time attempting to charge your card this way.
  • Maximum transfer is dependent on your available debit/credit card limit.
  • When transferring larger amounts (typically above RM10,000), it may be more expensive to transfer via debit/credit card charge as the fee is percentage (%) based.

China: UnionPay

UnionPay is the preferred method for sending and receiving funds in China. You can check with any friends who have a UnionPay account or apply for a UnionPay card via ICBC Malaysia, Public Bank, or UOB Singapore.

 

Money Remittance Services

A remittance service to transfer money to individuals globally. Popular examples of money remittance services are MoneyGram and Western Union.

MoneyGram

350,000 agent locations in 200 countries.

Cost/Fees:

  • MoneyGram cost estimator (moneygram.com)
  • Forex costs incurred twice for non-USD currency as transferred from MYR to USD and then USD to receiving currency.

Pros:

  • Fast funds transfer in as short as 10 minutes.
  • Receiver and/or sender do not need to have a bank account.
  • Lower costs for smaller fund transfer amount especially if recipient is in common SEA/Asian countries.

Cons:

  • Your recipient must physically pickup the funds from a MoneyGram location unless the receiving bank is a MoneyGram partner bank.
  • Fees are dependent on amount sent and recipient’s country with higher costs charged for larger transfers.
  • You must physically go to a MoneyGram location including Maybank branches/Forex booths to send money (online services available via CIMB Clicks).
  • Maximum transfer of USD10,000 per transaction and/or dependent on bank (typically RM10,000).

Western Union

500,000 agent locations in 200 countries.

Cost/Fees:

  • Sending fees dependent on recipient’s country.

Pros:

  • Fast processing able to claim money once recipient receives tracking number. Also known as Money Transfer Control Number (MTCN).
  • Receiver and/or sender can send cash, to a bank account, or via mobile.
  • Lower costs for smaller fund transfer amount especially if recipient is in common SEA/Asian countries.

Cons:

  • Fees are dependent on amount sent and recipient’s country with higher costs charged for larger transfers.
  • Funds must be received in the recipient’s local currency.
  • You must physically go to a Western Union location to send money (online services available via Maybank2U).
  • Maximum transfer of USD10,000 per transaction and/or dependent on bank (typically RM10,000).

 

Online Payment Apps/Wallets

Online payment portals are increasingly gaining in popularity. The most well-known of this kind in Malaysia would be US-based PayPal.

Paypal

Cost/Fees:

  • Free if you’re a buyer.
  • Domestic payments: (where applicable)Standard Rate#:3.9% + RM2
    Standard eBay Rate##:3.4% + RM2
    Merchant Rate#*:From 2.7% to 3.9% + RM2
    Merchant eBay Rate##*:From 2.4% to 3.4% + RM2
    International payments:Standard Rate#:4.4% + RM2
    Standard eBay Rate##:3.9% + RM2
    Merchant Rate#*:From 3.2% to 4.4% + RM2
    Merchant eBay Rate##*:From 2.9% to 3.9% + RM2

Pros:

  • Fast, immediate online processing.
  • No charges if you are the buyer of an item (vendor bears the fees).
  • Buyer protection if purchasing an item which does not arrive or does not meet seller’s description.

Cons:

  • Higher percentage based charges plus fixed fee.
  • As a sender, you cannot specify a particular bank account to receive the money but is based on the email address of the recipient.

TransferWise

A good way to receive money from overseas into Malaysian at competitive rates.

Cost/Fees:

  • Free if you’re recipient (as sender bears fees).
  • Sender bears fee of 0.5% / 0.7% / 1.0% depending on currency and size of transfer for some currencies. (more info)

Pros:

  • Uses real mid-market rate for conversion which has better exchange rates and 24-hour rate guarantee.
  • A clear-cut, transparent fee structure.
  • ‘Best rate guarantee” committed to price-match exchange rate you find anywhere else.

Cons:

  • Limited number of currencies especially for transferring money out of Malaysia (number of countries are increasing).
  • Takes 1-4 business days and only during regular banking hours for the transfer.
  • Additional charges of 0.3%-2% for credit card transactions.

Signup link: FREE first transfer of up to GBP 500.

MoneyMatch

A local Malaysian fin tech approved and regulated by Bank Negara to send funds globally.

Cost/Fees:

  • Claims to be lower by up to 90% & offers to beat any online rates (check rates)

Pros:

  • Transparent cost structure – what you see is what you pay.
  • Fast transfers at mid-rates using remittance players or banks.

Cons:

  • New to market and concerns on security and public trust.

More info: Transfer Money with MoneyMatch

RM50 off time transfer with promotional code “REF_OCME” !

 

Bitcoin / Cryptocurrencies

A low cost way to transfer funds quickly and globally without depending on traditional banking/transfer systems.

Cost/Fees:

  • Free or minimal to make transfers (1.0%) or lower.

Pros:

  • Lowest cost option to transfer funds.
  • Fast and anonymous transfers available.

Cons:

  • Volatility may affect the value transferred.
  • Additional step for funds to be transferred into (and out of) Bitcoin.
  • Both parties must have Bitcoin wallet setup.
  • Unable to reverse transaction once done.

More info: Bitcoin and Cryptocurrencies

 

Forex Dual Currency Account

A foreign exchange (Forex) currency investment account to buy one currency and sell another currency. Functions as a savings account and currency option. Often recommended for Premier/Priority/Private investment banking customers due to larger financial requirements. Suitable if you require currency in the foreign/alternate currency (i.e. children’s education). Also known as DCI/Currency Linked Investments (CLI). 

Cost/Fees:

  • No sales fees and hidden charges.

Pros:

  • Opportunity to obtain currency at a lower exchange rate.
  • Earn higher yields for funds at short investment periods of 1 week, 2 weeks, 1 month, or 2 months.

Cons:

  • High minimum investment amount of typically RM50,000 – RM100,000 and requirement to be defined as HNWI (High Net Worth Individual).
  • Limited currency pairs available which are largely based on popular global currencies (i.e. USD, SGD, GBP, AUD, NZD, CAD, JPY, HKD)
  • You take on higher risks of exchange rates between 2 currencies.
  • Requires selection of strike price/rate and knowledge of forex movements.
  • No principle / PIDM protection.

 

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