A GUIDE TO TRANSFERRING MONEY FROM MALAYSIA

31th May 2022

A wire transfer is an electronic fund transfer that takes place across a network managed by banks and money transfer service providers worldwide. Wire transfers require information from the party requesting the transfer, such as the foreign inward remittance receiver's name and account number, from the person initiating the transfer. These transactions are settled electronically rather than through a physical exchange of cash. Wire transfers, often known as wire payments, allow money to be transferred rapidly and securely without the need for currency exchange. They make it possible for two parties to safely exchange funds even if they are in different geographic locations. Typically, a transfer is made from one bank or financial institution to another. The participating institutions communicate information on the recipient, the bank receiving account number, and the amount transmitted rather than cash.

The wire transfer can begin once the information has been documented. Through a secure system such as Fedwire or SWIFT, the initiating firm sends a message to the recipient's institution with payment instructions. After receiving the information from the starting bank, the recipient's bank deposits its reserve funds into the correct account. After the money has been deposited, the two banking institutions settle the payment on the back end. Wire transfers are essential tools for anyone who needs to move money quickly and securely, especially when the recipients are not in the same place. They also allow large sums of money to be transferred. There are limits on how much money can be transmitted, however, these limits are usually quite large. For example, a wire transfer could be used to pay for a major purchase from an international supplier.

Conventional Money Transfer Services

To begin, we must first grasp a few fundamental characteristics of traditional transfers. For simplicity, most traditional transfer types can be thought of as network-based electronic money transfers. These are primarily classic bank-to-bank transactions, in which money is transferred within 1-2 business days. Overseas transfers may take an extra day or two. Even so, most of these transfers are completed within a few working days by banks. When it comes to starting a transfer, the specifics may differ by bank and type of transaction you're doing. Nonetheless, the process has a few universal traits. For instance, you'll almost certainly require:

- The name of the bank to which you are sending funds.
- The account number of the person to whom you are sending funds.

Banks require this information in a paper form or an online application (many banks accept wire transfers online, but some may require you to fill out a physical form depending on your bank). Banks frequently ask consumers to visit a branch for significant transfers. In addition to the information above, Wire transfers require money to send and often have costs connected with receiving them.

A Guide To Transferring Money From Malaysia

Determine How Much You Want To Transfer

Bank Negara Malaysia (BNM) is the country's regulator and central bank in the Malaysian financial sector. When clients request a wire transfer or e-money transaction, the regulatory body published standards on when and what type of CDD (Customer Due Diligence: identification documents) banking and non-bank organizations must conduct. When a client's bank wire involves an amount of 3,000 RM (690 USD) or more, standard CDD (national ID, residential address, employment status, transaction purpose, etc.) is required.

When any of the following conditions are met, regular CDD measures must be conducted for e-money transactions by both bank and non-bank issuers of e-money:

A) The account limit is equivalent to RM5,000 (1100 USD) and above.
B) The monthly transaction is equivalent to RM5,000 (1100 USD) and above.
C) The annual transaction is equivalent to RM60,000 (14 000USD) and above.
D) The account is for goods and/or services payments outside Malaysia.
E) The account is for cross-border wire transfers.
F) The account is used for cash withdrawal.

If a financial institution uses e-KYC to represent a non-face-to-face business connection, it must additionally meet the following requirements:

(A) A total transaction limit of 30,000RM (7000 USD) per day will be respected for remittance transactions completed by a person (including an expatriate) unless otherwise permitted by Bank Negara Malaysia.

(B) For remittance transactions carried out by a foreign worker, (i) a total transaction limit of 5,000RM (1100 USD) per month must be observed, unless otherwise approved by Bank Negara Malaysia; (ii) funds can only be remitted to the individual's home country, and beneficiaries must be pre-registered with the reporting institution when the business relationship is established.

Check That Your Money Is Safe

1.Double-check the details

Even if your bank preloads the figures, double-check them. If you send money to the wrong account, it can be difficult to retrieve it back (more on this below). Making a much smaller "test payment" of RM10 or less before sending the full amount can also be beneficial.

You can get rid of all those filing cabinets in favour of digital documentation and paperless payroll with the correct payroll software. It's not only more efficient in terms of space, but it's also more precise and searchable.

2.Request that the person on the other end of the line repeat figures and names

If you're making a transfer over the phone, ask the individual answering the phone to repeat every number and letter to you.

3.Beware Of Overdrawing Funds

The funds will be debited from your account instantly unless you set a later payment date. As a result, make sure you have adequate cash on hand to prevent paying high costs in penalties.

4.Pay Attention To ‘Confirmation Of Payee’ Warnings

If the name you've been provided doesn't match the name registered to the account information, you may be dealing with a fraudster, as mentioned above. Before making the payment, be cautious.

Digital Funds Transfer Options

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 begin the transfer.

2. Western Union

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

Pros

- A cash-to-cash transfer takes only a few minutes to reach your receiver (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 gift.
- In Malaysia, there are over 2,300 Western Union outlets, and most major banks have Western Union services available at their branches.
- Customers of RHB and Public Bank can conduct 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 nations 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 a RHB or Public Bank account must make the transfer in person at a Western Union location.

3. MoneyGram

MoneyGram is similar to Western Union in terms of service.

Pros

- Money is transferred in less than 10 minutes.
- A bank account is not required for your beneficiary. He or she picks up the money at a nearby MoneyGram location.
- Maybank and CIMB bank branches, as well as Bureau de Changes, offer MoneyGram services.

Cons

- MoneyGram's fees vary depending on the destination country and quantity sent, although they are often more than those charged by other services. For example, sending RM3,000 to nations such as the United States, United Kingdom, Singapore, and Australia costs RM145, compared to PayPal's RM118+ or Maybank's RM10 set rate for telegraphic transfers regardless of location or quantity. You must perform the transaction in person.

4. 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. Your recipient receives the funds in his or her PayPal account after you make the transfer.
- 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. Your PayPal account can be funded 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

- In 2013, PayPal stopped offering fee-free personal payments to Malaysian PayPal users. Sending money internationally with a Malaysian PayPal account will cost you 3.9% of the amount you send plus a predetermined fee dependent on the currency you receive, with the recipient bearing 2.5% of the cost.
- 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. Every day, the maximum amount you can top up is RM3,000 (USD equivalent).
- To receive the funds, you'll need a PayPal account. Withdrawing money from PayPal to a bank account can take a few days, depending on your beneficiary's country and bank. When the money in your recipient's PayPal account arrives, he or she will be able to use it to buy products or services from PayPal-accepting merchants.

5. Maybank2U Visa Direct

- Maybank2U Visa Direct is the newest kid on the block when it comes to sending money abroad. It enables you to transmit money from your Maybank account to a Visa debit, credit, or prepaid card of a recipient.

Pros

- It's a 24-hour service that may be accessed online.
- 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 receiver must have a Visa card.
- The daily transfer minimum is RM300 with a maximum of RM7,500.

There are other options, such as eWallets that were created for companies that employ migrant workers, like EVOLET. EVOLET aims to help immigrant workers and unbanked people, which makes it to be the best app for sending money and payment solutions for mobile reloads and bills.

EVOLET is a digital wallet app for migrant workers.

Learn more at https://evolet.io/