Transferring money from China to the US now (August, 2022)

[abcdefg]

When I left China hurriedly because of Covid in late January of 2020, I left most of my possessions in my Kunming apartment. Some friends went there yesterday on my behalf to empty it out so my landlord can rent it to other tenants. They will send me a few things and give away the rest.   

 

I left some emergency cash behind in a suitcase. They said it was a couple thousand USD. We are wondering about the best way to get the USD to me over here in Texas. I don't mind paying fees. 

 

Could they (Chinese citizens) simply deposit the funds in their own bank account there and send a wire transfer to me at my bank over here? I have done such transactions myself when I lived there in the past, but I'm not sure that is still a viable option today. I've also read that Western Union is possible, though I've never tried that method myself. 

 

Ideas? Suggestions? Thanks!

[Moshen]

I received bank wires from Chinese relatives in China to my US bank in early 2020. Neither they nor I had any real problems with it. Since it was a lot of money from a foreign source, my bank called me to ask what was up, and I told them. As I recall, there were fees on both ends but nothing terrible.

[abcdefg]

Thanks @Moshen. My Chinese friends have called their bank, and it sounds like the system still works the way it has all along. They will go there tomorrow or the next day to complete the transaction. I don't mind paying fees for such a valuable service. 

[NinjaTurtle]

Another idea is to use Western Union, which can be done at post offices in China. Just keep each transaction below $1,000 to make things easier.

[abcdefg]

Thanks, will keep that as a backup plan. At this point it looks as though a bank wire transfer will get the job done more efficiently. Will know more tomorrow. 

[imron]

On 8/14/2022 at 1:57 PM, NinjaTurtle said:

Just keep each transaction below $1,000 to make things easier.

Careful you don't get caught out by Structuring regulations.

[abcdefg]

Just by way of follow-up, to possibly help someone else who might have the same question at a later date, the bank wire transfer was very efficient, handled by 中国银行 (Bank of China.) The funds arrived at my local bank here in Texas yesterday. It only took a little over 24 hours from start to finish. The fee on my end was $15. It was more on the Kunming end because it involved some currency exchange as well as the actual transfer fee. The term to remember for a consumer-level wire transfer like this is 电汇。

[MTH123]

I just happened to be looking into something like this. But, I’m looking to send money from the U. S. to Taiwan. My dad has given me Power of Attorney to handle his finances for him. He no longer handles it himself. He needs around $4,000 per normal month for living and health-care expenses. So, I’ll be sending money routinely. Things I have had to consider are listed below. In addition, I’m only looking into ways to send money from a bank to another bank.

 

• ·      Fees

• ·      Exchange rates and so-called hidden costs in exchange rates

• ·      Anti-money-laundering limit

 

Anti-Money-Laundering Limit

 

The anti-money-laundering limit to avoid IRS paperwork and other potential headaches is $10,000 in the U. S. (Taiwan has a higher limit of 500,000 TWD, which is about 16,700 USD.) See the links below for a lot more information. For example, the limit also applies to a series of smaller amounts that exceed $10,000 within a 24-hour time period.

 

https://www.investopedia.com/terms/a/aml.asp

https://wise.com/us/blog/international-wire-over-10000

 

Bank of America

 

First, I looked into my bank, which is Bank of America. One option is to send money in USD (U. S. dollars). The fee for the outgoing wire transfer from Bank of America is $45. The fee for the incoming wire transfer to a bank in Taiwan (to be determined) is expected to be $10. Then, the bank in Taiwan would exchange USD with TWD (new Taiwan dollars).

 

In addition to fees, there’s the exchange rate. The “mid-market” exchange rate is the rate banks use between each other. But, regular people don’t get this rate. They get charged an additional margin, which includes so-called hidden costs. Depending on the situation, the margin could cost more than fees or less.

 

I’ve read that Taiwan banks give better exchange rates between USD and TWD than U. S. banks. The margin seems to be somewhere between 1% and 3%. It’s probably closer to 1% for a big client. It’s probably closer to 3% for someone like me. Let’s make up some examples.

 

Example #1. Bank of America limits wire transfers to only $1,000. For sending money in USD, Bank of America’s outgoing wire-transfer fee is $45. For the bank in Taiwan, the incoming wire transfer fee is $10. For the bank in Taiwan, the margin on the exchange rate is 2.7% (assumption). This is $25.52. So, the total cost is $80.52, which is 8.1% of $1,000. 8.1%! Bank of America gets 4.5%, and the bank in Taiwan gets 3.6%.

 

Example #2. Bank of America has an option to send money in TWD. The option has no fee. Bank of America would exchange the 1,000 in USD for TWD, before the money is sent to Taiwan. Bank of America’s margin on the exchange rate is about 4.3% (earlier this month). This is $43. For the bank in Taiwan, the fee for the incoming wire transfer is $10. The total cost is $53, which is 5.3% of $1,000. Bank of America would get 4.3%, and the bank in Taiwan would get 1%.

 

Chase is the one bank that may be slightly better than Bank of America.

 

Western Union and Paypal

 

Western Union and Paypal cost more than Example #2 (Bank of America), if I calculated correctly. Their processes are also more complicated, at least for Taiwan.

 

Wise

https://wise.com/us/

 

The following link shows what Wise can do without having to create an account with Wise: https://www.monito.com/send-money/united-states/taiwan/usd/usd/1000/?mode=live.

 

Example #3. Wise can send USD to Taiwan, but not TWD. Today, it costs $27.13 to send $10,000. For the bank in Taiwan, the incoming wire transfer fee is $10. For the bank in Taiwan, the margin on the exchange rate is 2.7% (assumption). This is $269. The total cost is $306.13, which is 3.06% of $10,000. Wise gets 0.27%, and the bank in Taiwan gets 2.79%.

 

I read that companies like Wise (and Xe and OFT) may also have to use an intermediary bank between the U. S. and Taiwan (because of something called SWIFT, which is used for international wire transfers; see https://www.swift.com/). The intermediary bank would charge a fee, which varies depending on the bank. I read a recent example in a Taiwan forum, in which the fee by an intermediary bank was $15.

 

Xe

https://www.xe.com/

 

The following link shows what Xe can do without having to create an account with Xe: https://www.monito.com/send-money/united-states/taiwan/usd/usd/10000/?mode=live.

 

Example #4. Xe can exchange USD with TWD and send TWD to Taiwan. There is no fee. For 10,000 USD, Xe’s margin on the exchange rate is 0.48%. This is $48. For the bank in Taiwan, the incoming wire transfer fee is $10. The total cost is $58, which is 0.58% of $10,000. Xe gets 0.48%, and the bank in Taiwan gets 0.1%.

 

OFX

https://www.ofx.com/en-us/

 

The following link shows what OFX can do without having to register with OFX: https://www.monito.com/send-money/united-states/taiwan/usd/twd/10000/?mode=live.

 

Example #5. OFX can exchange USD with TWD and send TWD to Taiwan. There is no fee. For 10,000 in USD, OFX’s margin on the exchange rate is 2.05%. This is $205. For the bank in Taiwan, the incoming wire transfer fee is $10. The total cost is $215, which is 2.15% of $10,000. OFX gets 2.05%, and the bank in Taiwan gets 0.1%.

 

Summary

 

The table below summarizes results of examples of $10,000 (USD) being sent from the U. S. to Taiwan.

 

Sending Institution*	Bank in Taiwan	Sending Institution Gets	Bank in Taiwan Gets	Total Cost
Bank of America	Receives TWD	4.3%	1%	5.3% = 805.15 USD
Wise**	Receives USD	0.27%	2.79%***	3.06% = 306.13 USD
Xe**	Receives TWD	0.48%	0.1%	0.58% = 58.00 USD
OFX**	Receives TWD	2.05%	0.1%	2.15% = 215.00 USD

* Western Union and Paypal are not good options.

** Wise, Xe and OFX may have an additional fee by an intermediary bank of, say, $15 (USD).

*** The margin on the exchange rate by a bank in Taiwan is assumed to be 2.7%. It could be much lower than 2.7% and probably wouldn’t be much higher than 2.7%.

 

There are many variables that could cause you to draw different conclusions for your situation, such as the countries involved, whether a business is involved, etc. So, if you’re looking for the best deal, you’ll want to do research that is like this.

 

At one point early on in my research, I thought I was stuck with Bank of America (or Chase). The three companies in the table above that specialize in international wire transfers are far better for my situation. They all seem to be reliable, too. Thank goodness! I’m looking forward to trying Xe.

 

[abcdefg]

That is quite an impressive analysis! 

 

Suggest steering clear of Xoom, a PayPal affiliate. Negative personal experience with them plus many bad reviews. 

[imron]

I’ve used wise and ofx for currency exchanges/transfers in the past, but only USD to AUD.

 

Wise is much less hassle to use, and would probably be my first choice. It’s always important to look at the actual amount you’d get when putting through a transaction though compared to the rates on the public website.

 

Wise always gave consistently better results for me over OFX.

 

I’m also curious as to whether xe can really deliver a rate that low. 

[889]

Wise can work well, but only for certain country pairs. It works best where both countries have banking systems that permit immediate transfers between accounts in different banks.

[MTH123]

In my previous post on 8/17/22, I took the free, third-party website www.monito.com too much at face value, because it didn’t require registering with Xe, OFX or Wise. It wasn’t very accurate for international wire transfers from the U. S. to Taiwan. (It may be accurate for other country combinations. I don’t know.)

 

Xe

 

I was excited to try Xe and registered with them. It turns out that contrary to www.monito.com, Xe can’t wire transfer money at all from the U. S. to Taiwan.

 

OFX

 

Then, I went through the process of registering with OFX, which was much more involved. At least it took less than a day. OFX can wire transfer money from the U. S. to Taiwan in Taiwan dollars (TWD). It can’t wire transfer money from the U. S. to Taiwan in U. S. dollars (USD).

 

It turns out that OFX’s margin on the exchange rate is closer to double at 4.76% vs. the 2.05% in my previous post. My previous post was unfortunately based on https://www.monito.com. This means that OFX’s margin on the exchange rate rivals regular banks. (OFX may be better for countries that have a lot more international wire transfers than Taiwan.)

 

Wise

 

Then, I registered with Wise. Wise does indeed wire transfer money from the U. S. to Taiwan in USD. It indeed does not wire transfer money from the U. S. to Taiwan in TWD. Wise gets 0.23%. This percentage is the same as my previous post, which was based on https://www.monito.com.

 

As far as the receiving bank in Taiwan, the margin on the exchange rate is about 1%, depending on the bank in Taiwan. It could be somewhat higher. It could even be somewhat lower, too. The important take away is that the margin on the exchange rate in Taiwan is far lower than it is in the U. S. Banks in Taiwan are used to exchanging USD for TWD, unlike banks in the U. S. There’s less risk for them, so they have much lower margins on the exchange rate.

 

Summary

 

The table below summarizes results of examples of 10,000 USD being sent from the U. S. to Taiwan.

 

Sending Institution	Bank in Taiwan	Sending Institution Gets	Bank in Taiwan Gets*	Total Cost
Bank of America	Receives TWD	5.0%	1.0%	6.0% = 600 USD
Wise**	Receives USD	0.23%	1.0%*** + 0.1%	1.33% = 133 USD
OFX**	Receives TWD	4.76%	0.1%	4.86% = 486 USD

* For a bank in Taiwan, the incoming transfer fee is assumed to be 10 USD (~300 TWD). In the scenario involving Bank of America, there are 10 incoming transfer fees.

** Due to the SWIFT process, Wise, Xe and OFX may have an additional fee by an intermediary bank(s) of, say, 15 USD (~450 TWD) (per intermediary bank). This isn’t included in the costs in the table above.

*** For a bank in Taiwan, the margin on the exchange rate from USD to TWD is assumed to be 1.0%. It could be somewhat higher or somewhat lower.

 

Again, there are many variables that could cause you to draw different conclusions for your situation, such as the countries involved, the direction of money transfer, etc., etc., etc.

[abcdefg]

I'm sure this information will prove helpful to others. Thanks for going to the trouble to post it in such clear, useable form. 

[imron]

On 8/18/2022 at 11:18 PM, imron said:

Wise always gave consistently better results for me over OFX.

Good to know this still holds true

[Jim]

A client in the US has used Wise to pay me both here in China and to my old bank back in the UK, went smoothly both times and I think they arrived at Wise having explored various options with the various and regular international remittances they make. My UK bank charges nothing to transfer GBP to China, then there's a flat local fee and the exchange rate loss, pretty reasonable, to the point not shopped around; will have to send some the other way shortly and wondering how best to do that, probably WISE again.

[abcdefg]

I have used Wise too, to send money from the US to China Mainland. (Wise/Transferwise.) Worked OK. But I've used bank wire transfer most of all, in both directions. No problems with that either. It goes without saying that you have to get all the data right for it to be smooth (spellings of names, correct address of record, account numbers, etc.) 

 

Got into an awful mess with Xoom. Endless verifications and unexplained fails. Poor explanations. Shabby customer service, outsourced to some foreign call center. Lots of frustration. I would definitely never attempt to use them again. In fact, I would go out of my way to never attempt to use them again. It's an affiliate of PayPal, which I thought would lend it some reliability and transparency, but it didn't. They have many consumer complaints. 

 

https://www.sitejabber.com/reviews/xoom.com 

[imron]

On 11/20/2022 at 5:30 PM, abcdefg said:

It's an affiliate of PayPal, which I thought would lend it some reliability and transparency

Hah, not for anyone with any significant dealings with PayPal ?