A GUIDE TO SENDING MONEY OVERSEAS OR REMITTANCE IN MALAYSIA

15th March 2022

Money transfers from one country to another have never been simpler. To send money to your loved ones in another country, you used to have to go to the bank or the post office. However, owing to contemporary technology, you may now send money wherever and whenever you choose.

Better still, they will be able to get the funds immediately. Say goodbye to the days of waiting for money to arrive in your hands.

There are numerous options to choose from, each with its own set of advantages and disadvantages, and its usefulness is determined by your needs. Western Union is pretty much instant, but its transfer speed comes at a cost.

Remittances from workers have increased exponentially in recent years, accounting for the majority of foreign revenue in developing nations, outnumbering foreign direct investment.

Remittances to LMICs reached a new high of $554 billion in 2019. Remittances were expected to drop 20% in 2020 as a result of the pandemic, according to the World Bank.

Despite this, digital remittances grew in many places as families found new means to communicate, and travel limitations and business closures created extraordinary funds for migrants to send money home, including the average migrant worker in Malaysia.

The market will continue to evolve while connecting with the modern wants and needs of global citizens as we continue to evolve our digital offering in the remittance industry and our clients rely more on technology. Remittances have been linked to reduced child labour, poverty alleviation, and improved nutritional benefits.

Fiscal benefits, on the other hand, include improving a country's financial sector's resilience, particularly during a crisis like the Covid-19 outbreak, by lowering prices, enhancing convenience and decreasing the time spent transmitting money, and expanding access.

Foreign employees, migrant workers, and ex-pats account for 15% of Malaysia's employment, and they send money digitally. Digital transfers give them access to a secure salary pay-out and transfer system.

Unlike its predecessors, senders do not need to be physically present to complete a digital remittance transaction. We should expect the industry to continue to innovate at a rapid pace, retaining its relevance for millions of people around the world and becoming commonplace on a global scale.

Method

1. Telegraphic Transfer

Telegraphic transfer is a conventional means of sending money abroad that transfers monies from your bank account to another bank account in another country. The bank will ask you to fill out a form and charge you a nominal fee.

Pros

- Telegraphic transfers may usually be initiated online with most major banks.
- Fees are fixed and based on the destination, regardless of the amount transmitted. Western Union, MoneyGram, and PayPal, for example, charge different fees depending on the amount transferred, the destination, and the currency.

Cons

- A fee is paid by both the sender and the recipient. The amount of the cost charged varies by the bank; some charge a flat rate regardless of destination, while others charge a scaled rate based on the destination.
- The money takes a few days to reach the recipient's bank account.
- The transfer procedure is lengthy: there are numerous forms to complete just to initiate the transfer.

2. Western Union

You can send money to an international recipient in cash or directly to their bank account with Western Union. Western Union is one of the quickest ways to send money internationally.

Pros

- It simply takes a few minutes for a cash-to-cash transfer to reach your recipient (who has to collect the money at a Western Union branch at his or her location). Within an hour, a direct-to-bank transfer reaches your recipient's bank account.
- Your recipient does not need to have a bank account to receive your money.
- In Malaysia, there are over 2,300 Western Union outlets, and most major banks have Western Union services available at their branches.
- RHB and Public Bank customers can make online transfers.

Cons

- While the fees charged by Western Union vary depending on the destination country and the amount sent, they are generally greater than those charged by competing services. For example, sending RM3,000 to the United States, United Kingdom, Singapore, or Australia costs RM172, compared to Paypal's RM118+ or Maybank's RM 10 fixed rate for telegraphic transfers, independent of location or amount.
- Only specific countries can use the direct-to-bank service. Recipients in countries where direct-to-bank service is not available would have to pick up their money at a Western Union branch.
- Users who do not have an RHB or Public Bank account must make the transfer in person at a Western Union location.

3. PayPal

PayPal is the most popular way to send and receive money over the internet. Email addresses are used for transactions.

Pros

- The transfer is instantaneous. After you complete the transfer, your receiver receives the funds in his or her PayPal account.
- It's a painless procedure. All you need is your recipient's email address and a few clicks to send money.
- RHB can be used to instantly top up your PayPal account. You can fund your PayPal account with Malaysian Ringgit (MYR) or US Dollars (USD). If you plan to send money overseas, make sure you top up your account with USD; MYR is a restricted currency.

Cons

- PayPal eliminated the fee-free personal payment option for Malaysian PayPal users in 2013. Sending money internationally with a Malaysian PayPal account will cost you 3.9 percent of the amount you send plus a predetermined fee dependent on the currency you receive, with the recipient bearing 2.5 percent of the cost.
- RHB is the only bank that can be used to fund your PayPal account. While topping up in MYR is available 24 hours a day, topping up in USD is only available Monday through Friday from 9.30 a.m. to 8 p.m. The maximum amount of money you can top up every day is RM3,000 (USD equivalent).
- To receive the funds, you'll need a PayPal account. Withdrawing money from PayPal to a bank account takes a few days, depending on the country and bank of your beneficiary. Your recipient, on the other hand, will be able to use the money in his or her PayPal account to pay for products or services from PayPal-accepting merchants whenever it arrives.

4. Maybank2U Visa Direct

Maybank2U Visa Direct is the newest kid on the block when it comes to sending money abroad. It allows you to send money from your Maybank account to a recipient's Visa debit, credit, or prepaid card.

Pros

- It's an internet service that's open 24 hours a day, seven days a week.
- All transfers are charged a flat fee of RM10, regardless of the destination country.
- Fast Fund recipients receive the sent funds within 30 minutes if they have a Visa card that qualifies. Transfers from non-Fast Fund issuers to Visa cards might take up to two business days. Before confirming the transaction, you will be notified if your recipient's Visa card qualifies for Fast Fund.

Cons

- Your recipient has to be a Visa cardholder. - The daily transfer limit is a minimum of RM300 with a maximum of RM7,500.

5. Bitcoin

Bitcoin is the most widely used digital currency in the world. If you want to learn more about bitcoin, check out our beginner's guide to bitcoin, which will be published later this week.

Pros

- There are no transaction fees.
- Instantaneous transfer (even though your recipient receives bitcoins immediately, it is suggested that they wait at least 10 minutes for the transaction to be securely confirmed).
- It's a painless procedure. You only need the recipient's bitcoin wallet address, which is a string of alphanumeric characters that often includes a QR code. Bitcoin wallets with email integration, such as Bitx.co, allow you to send bitcoins to a recipient's email address.

Cons

- In Malaysia, purchasing bitcoins is difficult. There is yet to be a dependable service that allows Malaysians to buy bitcoins quickly. Since bitcoin cannot be purchased via PayPal, most legitimate bitcoin exchanges need you to link your bank account to purchase bitcoins.
- Most bitcoin exchanges, unfortunately, do not yet support Malaysian bank accounts.
- As Bitcoin has yet to gain widespread acceptance, your recipient will almost certainly have to convert the bitcoins you send him or her into tangible currency. It could take anything from hours to days for the recipient to convert the bitcoins into cash, depending on where he or she lives.
- Bitcoin is similar to email in the early 1990s: while it can convey your message instantaneously, the low penetration of email at the time meant that your intended receiver was unlikely to have an email account, let alone a computer. It was probably worth it to just pay FedEx to deliver your letter if you needed it urgently.

6. EVOLET

EVOLET gives access to a secure salary pay-out system and is well-suited for two types of workers: migrant workers and low-wage Malaysians. Many migrant workers in Malaysia, both documented and undocumented, find it difficult to acquire a bank account.

According to Johnson Yu, the creator of EVOLET, certain nationalities find it impossible to open bank accounts since their nations have been red flagged by Bank Negara, even if they have work licenses and visas.

Because they do not speak Malay or English, many migrants suffer a language barrier. For ethnicities such as Nepalese, Bangladeshis, Filipinos, and Indonesians, who make up over 60% of Malaysia's foreign labour, the EVOLET application has been transcribed into 12 different languages.

While not every business accepts digital payments currently, the vast majority of them do, with more on the way. You may perform transactions more conveniently, swiftly, and securely when you pay using your global e-wallet.